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Fewer new cars being bought means a heating up of demand in the used car market

As the new car parc has steadily shrunk over the last couple of years, the knock on effect and simple mathematics means there are likely to be fewer 2-3 year old cars around. It was a prevailing condition following the recession of the early 90’s and it is a situation that is likely to be repeated over the next few years.

For example the 2.1 million new cars sold in 2008 become the car parc for all 1 year olds in 2009. They then become 2 year olds in 2010 and 3 year olds in 2011 and these types of cars are the life blood of the used car trade. New car sales in 2009 were 1.7 million units so we can see clearly that there will be 400,000 less cars in the used car market in the coming years.

This will inevitably lead to less choice and potentially a heating up in demand for this type of car.

Dealers will be looking to source this type of stock in order to offer a wider choice to customers both in terms of price variety but also the income potential for after sales.
With buyers in future likely to put value for money at the top of their search criteria, cheaper cars are likely to come to the fore as consumers look to cut costs.

We are already seeing evidence of buyers looking to change to much more fuel efficient cars and models that are cheaper to maintain. Also with eco friendly cars being at the most likely recipients of any assistance offered to the industry by government, customers are more likely to be attracted to cars which do 60 plus mpg and those which offer cheap, and in some cases free, road tax.

As a result of the downturn and changing consumer attitudes, the four wheel drive demand looks to have finally petered out and although it has sustained itself for longer than normal (and longer than anyone expected) it is likely that unless we have another terrible winter demand will not be likely to recover to the levels seen recently anytime soon.

Jul 20, 2010In51der

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