Trade used car guide Glass’s is reporting increasing demand for cars with low running costs as consumers adjust to the rising cost of fuel and insurance.
In editorial for the April edition Glass’s Guide managing editor Adrian Rushmore said buyers were opting for lower powered cars in the lower medium sector and downsizing in the executive sector.
“The focal point for retail demand is cars that have lower running costs. Whilst the shift in demand has been moving slowly in this direction for some time, it would appear that above inflation increases for fuel and insurance have conspired to accelerate this trend.
“Retail customers shopping for a lower medium sized car will ask, on the grounds of cost, why it would be necessary to buy anything with a bigger power output than a Focus 1.6 TDCi. Likewise, in the executive sector, a BMW 320d would meet most customers’ requirements.”
He also said the highlights at the auction were well presented small and supermini cars that could be purchased for under £3,000 although demand was still healthy above this price point.
According to Glass’s:
• A quiet retail market in March had led to fewer part exchanges
• Dealers have relaxed their criteria and are selling slightly older cars
• The most problematic area of the market in March was 4×4 but there is no suggestion of a collapse
• Some concern about the extended holiday period from Easter to the May Bank Holiday as it may be the time when sales take a dip and trade prices come under more pressure
• Forecasts that fewer new car sales in 2008 would reduce the available supply of used stock have not materialised. Most dealers have been successful in buying stock as and when needed
• In terms of supply, demand and prices the market is “in a condition of steady state”