the used car market report 2012 - university of buckingham

Centre for Automotive Management The University of Buckingham Business School www.buckingham.ac.uk/cam

The Used Car Market Report 2012

A REPORT BY BCA

The Used Car Market – a report by BCA

3

Foreword

We are delighted to bring you this

22nd edition of the BCA Used Car

Market Report.

This year's research looks at the

effect that continuing financial

pressures are having on private

motorists' decisions on buying and

running their car, and the impact of

prolonged, lower new car volumes

on the used car market.

Our editor, Professor Peter N C

Cooke, the Professor of Automotive Management, the Centre for Automotive

Management at The University of Buckingham is a well-known commentator

on the automotive industry.

Professor Cooke spent over 20 years in the motor industry and has taught,

researched and written about the industry at business schools for a similar

period. He has undertaken much work on the fleet, used car and LCV sectors

and edited the BCA Used Car Market Report for several years.

The Buckingham Automotive team has sought to retain the best aspects of

this long-standing report, and has developed new analysis and commentary

on the changing shape of used car market.

Given the uncertainty surrounding the UK’s gloomy economic outlook, and

the implications for the automotive sectors, the BCA Used Car Market Report

2012 is most timely for everyone involved in the used vehicle industry.

Jon Olsen CEO BCA Vehicle Remarketing

The Used Car Market – a report by BCA 4

Contents

Foreword 3

Introduction 6

Overview

Used car market stable The new car market The used car market Consumer perspective

7

789

10

UK Market Review

Used car volumes continue to rise Used:new car ratios Used car market sectors Dealers’ used car volumes Private sector used car sales UK car market value rises Dealer/private sector used car market value Used car selling prices Used car prices at auction Car parc oldest for quarter of a century Cars being scrapped earlier The ‘parc turn’ indicator Car parc ageing rapidly Company car disposals fall

12

1212121315161718181920212223

Consumer Experience

Part One – What Used Car to Buy? What used car to buy next? 'Crunch Factors' Part Two – Where to Buy From? Which used car retailer to buy from? Buying from franchised and non-franchised dealers Three-quarters of motorists buy a used car Seven out 10 families own a car Hatchbacks and saloons most popular Buying used rather than new? Sales of used diesels fall Used car satisfaction rises once more Part Three – Dealer Relations and Buying Intentions Used car customer follow-up Buying a car in the next year? What type of car to buy next? Where to buy the next car? Part Four – Economic Recovery, Running Costs, and Keeping in Touch What car to buy during economic recovery? Reducing personal motoring carbon footprint Offsetting the rising cost of fuel Steps Taken to Cut Car Running Costs Keeping Customers in the Loop A Good Deal is Still the Critical Factor

25

262627282829293031323233353536363738383940414243


Contents

Regional Review

'Friends and Family' Holds More Sway This Year Dealer follow-up calls When to buy the next car? Where to buy the next car? What car to buy next? How satisfied are used car owners? Cutting Back on Running Costs

44

44454646474849

European Overview

New car market EU15 markets New member states Used car volumes Car parc Parc Turn Percentage Used:new volume ratios Used car sales per 1,000 population United Kingdom, Germany. Italy France, Spain

50

50515253545556575859

United Kingdom Economic Situation

The UK Economy – A Macroeconomic Viewpoint Not for the Faint Hearted Mid Year Financial Crisis Do We Have a Plan B? Used Car Market

61

6162646366

Prospects, Buyers and Follow-ups

Tyre-kicking Has Gone Online Social Media Presence A Fickle Mistress Customer Contact – What Is It Really? Car Owners' Preferences What Car To Consider Buying? Strategic Implications

67

67676768697071

LCVs – A Black Hole on the Horizon?

New LCV Sales Plummet Replacing Overage Vehicles The Used LCV Supply Gap Not Yet Critical Emerging Issues for the LCV Industry

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7273747475

Dealers Need to Face Changes in Consumer Behaviour 76

BCA – Europe's Leading Vehicle Remarketing Company 79

BCA Network 82

Statistical Data 83

Research 97


Introduction

The BCA Used Car Market Report 2012 aims to provide the same invaluable insight

into the latest developments in the UK used car industry that each of our previous

editions has done.

The UK Market Review is based on statistical information from national sources. This

is updated and compared with previous years’ data to provide an authoritative

assessment of volume and value trends in the used car market.

The Consumer Perspective section of the report is based on a BMRB International

survey of UK car owners. This contains a review of the key issues that influence used

car buyers when deciding which car to buy, where to buy from and what car owners

expect when buying a used car.

This year, the consumer survey also looked at what type of car motorists might

consider buying as the country's economy struggles to recover, and how high fuel

prices would have to rise before car owners decide to change to a more fuel-efficient

car. Respondents were also asked if they had taken any concerted steps to reduce

their car running costs and how they prefer their used car dealer to keep in contact

with them.

The European section of the Used Car Market Report contains updated trend

information on Europe’s new and used car markets.

Other sections include ‘United Kingdom Economic Situation’ looking at the impact of

the economy on the country's new and used car markets – while 'People, Buyers and

Follow-ups' considers the critical role of communications from used car retailers' and

their customers' point of view.

The report also looks briefly at the used LCV market and the key issues driving this

key automotive sector. The used LCV sector will be examined in more detail in the

forthcoming ‘Used LCV Market Report 2013'.

BCA is pleased to provide this 2012 edition of its Used Car Market Report to all those

associated with the UK automotive industry.


Overview

Used car market stable

The severe 2008/2009 economic downturn pushed combined new and used car

volumes below the nine million mark to 8.8 million units in 2008, dipping to 8.3 million

the following year.

Thereafter, combined sales settled at 8.6 million units in 2010 and 2011 as stronger

used car volumes offset the impact of the weaker new car market.

Market volumes new vs. used; 2002 – 2011

2.02.12.42.32.42.62.62.6

2.0 1.9

6.36.7

7.17.47.3

6.87.2

6.6 6.6 6.7

9.79.8

9.29.7

9.4 9.5

8.88.3

8.6 8.6

1

2

3

4

5

6

7

8

9

10

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Mill

ions

New Used Total

Source: SMMT/BMRB

Following an 11-year spell comfortably over two million units, new car sales fell to

1.99 million in 2009 – falling back to 1.94 million units in 2011 after a brief recovery

to 2.03 million in 2010.

The UK accounted for 15.2% of Western Europe's new car market in 2011,

compared with 15.6% the previous year – and holds third place in the European new

car sales league ahead of Italy (1.75 million) by 193,000 units.

UK used car volumes dropped during the recession to 6.3 million units in 2009.

Despite a weak and uncertain economy used car volumes rose to 6.6 million in 2010,

edging up to 6.7 million units in 2011.

Overview


The new car market

Following six years over the £30 billion mark, the value of the UK new car market

dipped to £28 billion in 2008 and 2009 as new car volumes fell steeply during

recession.

The new car market value recovered to £28.7 billion in 2010 and reached £29 billion

the following year, despite a 90,000 drop in new car volumes in 2011.

New car market volume and value; 2002 – 2011

1.9 1.9

2.1

1.7

2.42.4

2.6 2.6 2.6

2.3

32.4

33.5

32.4 32.2 32.433.0

28.1 28.028.7 29.0

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2.8

3.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Mill

ions

20

25

30

35

£ b

illion

Volume Value Scrappage deals

0.30.1

Source: SMMT//BMRB

Despite the boost from 285,000 scrappage deals, new car registrations fell steeply to

1.99 million units in 2009, and have failed to improve significantly since. 2011 saw

new car volumes slip 4.4% to 1.94 million compared with 2010's figure of 2.03 million

units.

Private sector new car sales dropped 14.1% and 134,911units to 823,094 in 2011.

New car sales to the 25-plus fleet sector broke through the one million mark once

more last year, rising 4.7% to 1.02 million units, pushing this sector's new car market

share up to an all-time high of 52.5%.

As high prices of fuel, food, household essentials and high unemployment continue to

erode car buyers' confidence and spending power, new car volumes remain relatively

weak in 2012 – edging up 2.7% on 2011's low base to 1.06 million for the first six

months of the year – still some 15% below 2007's pre-recession level.

However, the SMMT believes the new car market is stabilising, with the 12-month

running total of 1.97 million units, at the end of June 2012, some 30,000 above

2011's full year figure. It predicts the UK's new car market will rise 1.6% to 1.97

million in 2012 – and by a further 1.0% to 1.99 million units in 2013.

Overview


The used car market

UK used car sales topped seven million for four out of five years from 2003, falling

back to 6.3 million units in 2009 as recession hit the used car market hard. While

hopes of an economic recovery saw used car volumes rise to 6.6 million in 2010,

growth slowed to 6.7 million units in 2011 as the economy headed towards a double-

dip recession. UK used car market values edged upwards in 2011 to a new high of

£35.7 billion.

Used car market volume and value; 2002 – 2011

6.7

6.3

7.1

7.47.3

6.8

7.2

6.6 6.66.7

28.1

32.0

30.0

32.3

33.933.3

32.4

34.235.0

35.7

4

5

6

7

8

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Mill

ions

20

25

30

35

40

£ billion

Volume Value

Source: BMRB

Stronger supply and sales of 6-8 year-old cars saw used car market volumes grow by

118,000 units to 6.69 million in 2011, as weaker supply from lower new car sales

continued to hamper sales of younger used vehicles.

Dealers' and private sector used car volumes both grew in 2011 – the former's up 2%

to 3.74 million and the latter's 7% higher at 2.63 million units.

Sales of cars in the 0-2 year age group dropped 9.5% to 642,000 units in 2011 –

this segment's share of the market down to 9.6% from 10.8% the previous year.

Sales of 3-5 year-old cars fell by 6.2% to 1.73 million units, their used car market

share slipping 2.2% to 25.8%.

The 6-8 year age group's sales volumes continued to rise in 2011, up 7.4% and

124,000 to 1.79 million units, their share of the market 1.4 points higher at

26.8% – boosted by high volumes of new cars sold in the first half of the 2000s.

Sales of 9 years-plus cars grew for the second year running, rising by 7.5% to

2.53 million and 37.8% of the used car market.

Overview


Consumer perspective

Twenty-four per cent of this year's consumer survey's respondents had bought a car

over the past two years, three-quarters of them choosing to buy a used car instead of

a new vehicle.

'Views of friends and family' (24%) edged 'personal experience of make and

model' (21%) into second place amongst the issues motorists consider when

thinking about what used car they might buy next. ‘Independent Internet sites'

were a factor with 16% of used cars buyers, while 'used car sites/showrooms'

(12%) and 'dealers' websites' (10%) are also significant factors.

'Price' (41%), 'low mileage' (31%) and 'make and model', cited by 30% of car

owners, are 'crunch factors' in deciding which particular used car to buy –

although 'engine size' (18%) and 'body type' (17%) are also key factors.

Affordability tops motorists' priorities when deciding which used car retailer to

buy a car from. 'I got a good deal on the car' was the number one issue for a

third of survey respondents, followed by 'the right car at the best possible price'

for three out of 10 used car buyers. A fifth of used car owners look to 'trade in'

their existing car and prefer to do business with a 'local dealer'.

Diesel-engined cars’ used car market share dipped to 33% in 2012 from 34% in

2011 and 36% in 2010 – as fewer fleet vehicles from 2009's low new car

volumes reached the marketplace and private used car buyers looked towards

smaller, petrol-driven models.

Owners' satisfaction with their used car rose two points to 95% this year – 67%

of them saying they were 'very satisfied', while 28% were 'quite satisfied' with

their latest used vehicle.

This year's report shows a marked drop in the number of car owners who believe

they will 'certainly' or 'quite likely' buy a used car in the next 12 months – down

3% to 11% in 2012 from 14% the previous year. The number of motorists who

believe there is a '50:50 chance' they will buy a car in the next year edged up

one point to 9%.

Three-quarters of car owners plan to replace their car with a used one next time

they make a change. However, there has been a swing of 4% towards diesel this

time – 30% of prospective used car buyers saying they intend to go in this

direction – a long way short of diesels' current 50% share of the new car market.

The number of car owners saying they will deal with a franchised dealer next time

rose by 5% to 50% in this year's survey, half of them trading in their old car.

Thirty per cent of motorists plan buying privately or from a friend, while 13% are

considering doing business with a non-franchised used car retailer.

Overview


Faced with a gloomy economic outlook, nine out of 10 motorists intend to

replace their car with a different type of vehicle next time. Top of their shopping

list are 'a car with better fuel consumption', 'lower road tax', 'a smaller car',

'best purchase price' and 'lower CO2' – all things that used car buyers have a

great degree of control over.

'Walking more often' and 'cutting the number of journeys' top the list of

measures motorists have in mind to cut their personal CO2 – with other steps

such as 'driving more slowly', 'reducing annual mileage', 'buying a car with lower

emissions' and 'buying a smaller car' also in the frame.

Over half of this year's respondents (53%), believe the higher price of fuel will

eventually push them into 'buying a more fuel efficient vehicle' or 'change their

driving habits' – or both

Car owners show a clear preference for receiving the least invasive type of

communication from the dealer they bought their used car from; ones they can

read and absorb when it suits them and not the sender. Email leads the field in

this respect, cited by a fifth of survey respondents as their preferred means of

contact, followed by letters/mailing then websites.

Evolution or revolution?

The Overview points to an automotive industry in evolution, some would claim closer

to revolution on a number of fronts;

The second recession in under four years, and the prospect of an agonisingly

slow economic recovery is reflected in prolonged low new car market volumes –

'starving' the used car market of younger, lower mileage units – with no prospect

of a significant upturn in sight.

Younger used car availability will become much tighter before it improves, with

the pent-up demand for younger and middle-aged used cars increasingly difficult

to satisfy for some considerable time to come.

Diverging private sector and business new car buyer patterns mean the mix of

cars that will ultimately enter the used car market will differ significantly from the

historic stock profile with associated revenue and profit implications.

New and used car markets appear to have become increasingly price sensitive in

recession which, in turn, will put increased pressure on 'value for money' - and

dealer margins.

Perhaps dealers may have to rethink car buyers' affordability in terms of selling

new or used cars, and consider the product offering more in terms of monthly

payments than a one-off capital price?


UK Market Review

Used car volumes continue to rise

2011 saw car buyers'

confidence and incomes

eroded by a powerful mix of

high inflation, escalating fuel

costs, rising unemployment

and an economy heading

towards a double-dip

recession.

This saw new car sales fall

4.4% to 1.94 million last

year – around a half a

million units lower than pre-

recession market volumes.

A rise of 1.8% in used car volumes to 6.7 million units and flat used car selling prices

saw the used car market value edge up £0.7 billion to a new high of £35.7 billion last

year.

Used:new car ratios

The ratio of used car sales to new car sales rose

for the second year running in 2011 to 3.4:1, as

used car volumes increased to 6.7 million and

new car volumes dropped 90,000 to 1.94 million

units.

Used car market sectors

Rising sales of 6-8 year-old

cars helped used car

volumes rise by 1.8% and

118,000 units to 6.7 million

as sales of cars in the 0-2

and 3-5 year age groups

slipped further in 2011.

Dealers' and the private

sector's used car sales both

grew in 2011 – dealers'

volumes up 2% to 3.74

million and private sales 7%

higher at 2.63 million units.

Car volume trends; 2007 – 2011

2.42.1 2.0 2.0 2.0

7.16.7

6.36.6 6.7

0

1

2

3

4

5

6

7

8

2007 2008 2009 2010 2011

Mill

ions

New Used

Source: SMMT/BMRB

Used:new car ratios; 2007 – 2011

2007 3.0:1

2008 3.2:1

2009 3.2:1

2010 3.3:1

2011 3.4:1

SMMT/BMRB

Volume of used car sales by source; 2007 – 2011

0.4

2.7

4.0

7.1

0.4

2.7

3.6

6.7

0.6

2.2

3.5

6.3

0.5

2.4

3.7

6.6

0.3

2.6

3.7

6.7

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Mill

ions

2007 2008 2009 2010 2011

Other/Auction Private Dealers Total

Source: BMRB

The used car market edged up to a new high of £35.7 billion

UK Market Review


Looking at the age profile of used cars sold in 2011 shows the market continues to

change:

Sales of cars in the 0-2 year age group fell for the third year running in 2011, by

9.5% to 642,000 units, pushing this segment's share of the used car market

down to 9.6% from 10.8% the previous year.

Sales of 3-5 year-old cars also dropped last year, by 6.2% to 1.73 million units,

their used car market share slipping 2.2% to 25.8%.

Used car market volume by age of car; 2007 – 2011

642710

989 978

762

1725

1840188418821949

1632 15831481

1793

1669

2489

2208 2174

25292352

500

1000

1500

2000

2500

3000

2007 2008 2009 2010 2011

Tho

usan

ds

0-2 3-5 6-8 9+ yrs

Source: BMRB

Sales of cars in the 6-8 year age group continued to rise in 2011 by 7.4% and

124,000 units to 1.79 million, driving this sector's market share up 1.4 points to

26.8% – as record high volumes of new cars sold in the first half of the 2000s

bolstered supply in this segment of the used car market.

9 years-plus used car volumes grew for the second year, rising 7.5% to 2.53

million and 37.8% of the used car market.

Dealers’ used car volumes

Stronger sales of 6-8 year-old cars helped used car retailers' volumes grow 2% to

3.74 million units in 2011, their share of the market remaining at 55.9% (see overleaf).

Dealers' sales in the 0-2 year age group slipped by 1.5% to 535,000 units, but

their share of this segment rose to 83.3% in 2011.

Dealers' 3-5 year-old used car volumes rose by 1.8% and 23,000 to 1.33 million

units, their share of this sector reaching a three-year high of 76.8%.

Sales of cars in the 6-8 year age group continued to rise in 2011

UK Market Review


Dealers’ used car volumes and market share; 2002 – 2011

3.57

3.87

3.66

3.874.01 3.97

3.613.53

3.673.74

55.955.856.0

54.3

56.3

54.8

53.353.653.654.3

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

% M

arket share

40

45

50

55

60

Mill

ions

Millions Market share

Source: BMRB

While dealers' sales of cars in the 6-8 year age group rose for the second year in

2011, their share of this segment slipped 0.9% to 62.8% as retailers faced fierce

competition in this buoyant sector of the market.

Dealers’ used car volume by age of car; 2007 – 2011

663

856

854

543 535

15421462

13581302 1325

1063 11261034

780

965

759 755

473513

606

0

200

400

600

800

1000

1200

1400

1600

1800

2007 2008 2009 2010 2011

Tho

usan

ds

0-2 3-5 6-8 9+yrs

Source: BMRB

Used car retailers' share of the 9 years-plus group fell to 29.9% in 2011, their

volumes dropping 0.5% to 755,000 as a growing number of buyers turned to

private sources for cheaper cars.

UK Market Review


Dealers' used car sales

continued to edge towards

older cars. As new car

volumes feeding the market

settled around two million

units for the fourth

successive year in 2011,

retailers were forced to look

to older units for adequate

used car supply.

Sales of 0-2 year-old cars

now account for just 14% of

dealers' used car volumes,

while sales of cars in the 6-8

year group account for 30% of their used car business compared with 24% five years

earlier.

Private sector used car sales

Higher volumes in the 6-8 year group (+15.9%) pushed the private sector's used car

volumes up 7% to 2.63 million units in 2011 – its share of the used car market rising

1.9 points to 39.3%.

Private to private used car volumes by age of car; 2007 – 2011

609399 65 47

281278317

326313

598708

348

513442

16441774

15061594

1703

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2007 2008 2009 2010 2011

Tho

usan

ds

0-2 3-5 6-8 9+yrs

Source: BMRB

The private sector's sales of 0-2 year-old cars dropped by 33,000 units to

60,000 units in 2011, its share of this segment dipping to 9.4%.

Volume share of dealers’ used car sales, by age of car 2011

6-8 years30%

3-5 years36%

0-2 years14%

9+years20%

Source: BMRB

Retailers were forced to look to older units for adequate used car supply

UK Market Review


While private-to-private sales of 3-5 year-old cars rose by 3,000 to 281,000 units

last year, their share of the sector slipped from 11.3% to 10.7% year on year, as

dealers fought hard for supply in a sector weakened by ongoing low new car

volumes.

The private sector’s sales of cars in the 6-8 year age group rose 15.9% and

70,000 to 513,000 units, taking 28.6%of this segment compared with 26.5% the

previous year.

Private-to-private 9 years-plus used car volumes grew by 130,000 units to 1.77

million last year, their market share edging up to 70.2% from 69.9%.

The unpredictable supply of quality, 0-5 year-old cars saw used car retailers focusing

more on vehicles in the 6-8 year age group, where there is currently a stronger supply

from the high new car volumes in the early 2000s.

Last year a struggling economy heading for a double-dip recession, falling family

incomes, high unemployment and stubbornly high inflation, saw consumer confidence

hit hard and more used car buyers turn to older, cheaper used cars.

UK car market value rises

The total value of the UK's new

and used car markets rose by £1

billion to £64.7 billion in 2011, as

higher used car volumes offset a

drop in new car sales – some way

short, though, of the pre-recession

high of £66.3 billion reached in

2007.

While new car volumes fell by 4.4%

last year, a move towards larger

cars and prestige marques (SMMT registration data) saw the value of the new car

market edge up £0.3 billion to £29 billion.

Higher used car volumes made up for flat average used car selling prices – reflecting

an ageing mix of used car sales. This helped push the value of the used car market

up £0.7 billion to a new high of £35.7 billion last year – £6.7 billion higher than the

new car market value.

New and used car market values; 2007 – 2011

£ billions 2007 2008 2009 2010 2011

New 33.0 28.1 28.0 28.7 29.0

Used 33.3 32.4 34.2 35.0 35.7

Total 66.3 60.5 62.2 63.7 64.7

Used % * 50.2 53.6 55.0 54.9 55.2

* as % of total market value

Source: BMRB

The value of new and used car markets rose to £64.7 billion in 2011

UK Market Review


Dealers/private sector used car market value

Dealers' used car market value edged up £0.3 billion to £26.8 billion in 2011, higher

used car volumes counteracting lower selling prices from the ageing used car sales

profile. The private sector's market value also increased, by £0.6 billion to £7.4 billion

last year, a combination of higher volumes and selling prices.

Value of used car sales by source; 2007 – 2011

1.7 1.4 1.7 1.53.4

7.05.9 5.66.8 7.4

25.724.0

25.226.5 26.8

33.3 32.434.2 35.0 35.7

0

5

10

15

20

25

30

35

40

2007 2008 2009 2010 2011

£ B

illio

ns

Other/Auction Private Dealers Total

Source: BMRB

Share of used car market value; 2002 – 2011

76.374.274.7 75.3 75.5 75.175.673.774.077.0

21.3 19.5 18.2 17.8 17.6 17.721.6

16.419.3 20.7

0

10

20

30

40

50

60

70

80

90

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

%

Franchised/non-franchised Private to private

Source: BMRB

Franchised and non-franchised used car dealers retained their three-quarters share

(75.1%) of used car market value in 2011; the private sector's share rising to 20.7%,

as fewer used car buyers resorted to auction or other sources last year.

UK Market Review


Used car selling prices

Overall average used car selling prices remained flat at £5,336 in 2011, compared

with £5,332 the previous year, Dealers’ average used car selling prices slipped from

£7,295 to £7,169, while the private sector's average used car prices edged up £66 to

£2,815.

The chart below shows the relationship between dealers' used car selling prices and

the Retail Price Index (RPI) over a 20-year period. While the two indices have followed

much the same trend over this time span, dealers' selling prices tend to be lower

than RPI during periods of economic downturn and credit restrictions.

Average dealers' used car selling prices; 1998 - 2011

164.8162.1

223.9

199.2

147.3142.8

139.5134.8

131.6129.6

124.9

118.0

107.8

152.4154.7

159.3

174.6169.6

179.6185.3

193.3

203.9

213.7

203.6

186.0

148.4

138.6

117.4 103.7

120.9

120.6

121.3

132.8

101.4

162.4158.1

164.5163.0166.7

174.1177.5

178.3178.0183.6

202.9

207.2

100

110

120

130

140

150

160

170

180

190

200

210

220

230

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

RPI Dealers' used car selling price

Source: BCA

The gap between selling prices is currently wider than any point since 1990. Is this a

sign of the length and depth of the current recession, price sensitivity or a shift

towards older used cars?

Given the forecasts of at least a further 18 months of economic woes, it could be

some time before the two indices converge once more – although this will be helped

by the significant fall in the RPI index, which dropped from 5.5% to 2.8% over the

past 18 months, and is expected to fall further.

Used car prices at auction

Average used car prices at auction fell steeply during recession to £4,836 at the end

of 2008. They made a strong recovery during 2009 and 2010 reaching £6,451 in

December 2011 – a rise of £1,515 over the three year period.

Average used car selling prices remained flat at £5,336

UK Market Review


Average used car prices at auction; 2009 – 2012

£5,9

38

£5,7

92£5

,792 £5

,905

£5,9

74£5

,985

£5,7

52£5

,626 £5

,790

£5,6

62£5

,633

£5,8

88£6

,252

£5,9

63

£6,2

01£6

,451

£6,0

40£6

,244

£5,9

74

£5,5

99£6

,098

£5,9

64

£5,9

05

£5,7

84£5

,802

£5,6

56£5

,871

£5,7

91£5,9

59£5

,939

£6,1

88£5

,903£6

,021£6

,217

£6,2

23

£6,0

28£5

,850

£5,1

36£5

,571

£5,5

82£5

,641 £5

,773

£4,000

£4,500

£5,000

£5,500

£6,000

£6,500

£7,000

Jan-09

Mar May July Sept Nov Jan10

Mar May July Sept Nov Jan-11


Mar May

Source: BCA

Apart from a seasonal blip in April, auction prices remain firm in 2012; fleet and lease

values reaching a record high of £8,042 in June this year – even though the average

fleet car sold had recorded 3,000 miles more than those coming to market 18 months

earlier. Good quality vehicles remain in short supply in the fleet sector and buyers

continue to focus on quality and value, while competition for the best vehicles is

fierce.

The rise in average values at the 'value-for-money' end of the market reflects the

squeeze on household budgets and the increased demands from motorists for

affordable transport.

However, the supply side of the auction market cannot be overlooked. There have, at

times, been supply constraints of the best, retail quality cars which, in a competitive

remarketing environment, are contributing to the general strength in auction values.

Cars in parc oldest for quarter of a century

The UK car parc rose steadily for decades to 30.2 million in 2007, settling around

that level since as new car market volumes fell to two million units in 2009 and have

failed to recover from that point.

The average age of cars in the parc, which had fallen to a 14-year low of 6.69 years

in 2004, has climbed to 7.44 over the past six years – the highest figure for over a

quarter of a century (see overleaf). The average age of cars in the parc will reach new

heights over the next few years as the bulge of new cars sold in the early 2000s head

for the 10-years plus mark – and will only decrease when new car volumes

substantially exceed two million units for several years.

Fleet and lease auction values reached a record high of £7,934

UK Market Review


UK car parc – average age of car; 2002 – 2011

30.430.330.130.330.229.0 29.4 29.8 29.9

28.5

7.25

7.06

6.88

6.706.78

6.69 6.786.79

6.93

7.44

10.0

15.0

20.0

25.0

30.0

35.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Mill

ions

5.00

5.50

6.00

6.50

7.00

7.50

Averag

e age

Millions Average age

Source: SMMT

Cars being scrapped earlier

The number of

cars running until

the 12-year mark

rose to 75.3% at

the end of 2011,

from 71.7% the

previous year, as

most of the

400,000 ten-years-

plus units, traded

in under the

scrappage scheme

in 2009/2010,

were replaced by

younger cars.

Cars continue to

be scrapped

earlier; only 36.1% of them on the country's roads at the 15-year point compared

with 40% ten years earlier.

UK car parc survival rate; 2011 vs. 2002

30

40

50

60

70

80

90

100

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Years

Sur

viva

l rat

e %

2011 2002

Source: SMMT Cars continue to be scrapped earlier

UK Market Review


The ‘parc turn’ indicator

The ‘parc turn’

indicator, which

expresses annual

new and used car

volumes as a

percentage of the

UK car parc, is a

useful way of

monitoring car

sales trends.

The overall ‘parc

turn’ slipped from

28.4% in 2010 to

28.3% in 2011, 5.5

points below

2003's figure when

new and used car sales were both at a peak. This was due to flat new and used car

volumes of 8.6 million and the car parc rising 0.1 million to 30.4 million units.

The new car parc turn fell to 6.3% in 2011 from 6.6% the previous year, reflecting a

drop of 4.4% and 90,000 units in new car volumes.

In contrast, an

increase of 1.8%

(118,000 units) in

used car sales saw

the used car parc

turn rise marginally

to 22%.

Franchised and

non-franchised

dealers' slice of the

used car parc turn

edged up to 12.2%

last year, while the

private-to-private

sector's share rose

0.5 points to 8.6%.

Car parc turn; 2002 – 2011

23.522.1

20.921.8 22.0

24.824.523.2

24.823.1

6.36.66.66.97.97.78.08.89.09.1

28.328.427.629.0

31.532.3

33.832.0 32.532.5

0

5

10

15

20

25

30

35

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

%

Used % parc New % parc Total

Source: SMMT/BMRB

Dealer vs. private sector used car parc turn; 2002 – 2011

13.2

11.911.6

12.1 12.2

13.7

13.112.6

13.5

12.5

8.68.1

7.3

8.98.9

9.710.1

9.6

10.3

9.5

5.0

7.5

10.0

12.5

15.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

%

Dealer % of parc Private % of parc

Source: SMMT/BMRB

The overall 'parc turn' slipped from 28.4% in 2010 to 28.3% in 2011

UK Market Review


Car parc ageing rapidly

While the car parc is destined to settle around the 30 million mark for at least the

next three years, the average age of cars on the country's roads has increased

rapidly. This will continue to do so as current new car volumes flat line around two

million units and cars from record new car sales in the early 2000s are approaching

the 10-years plus mark.

The used car

supply chain is

essentially a

funnel; new cars

feed into the top of

the funnel and flow

down to ultimately

become used cars,

changing hands

four times on

average before

they are scrapped

(source SMMT).

It's stating the

obvious, if the flow of new cars slows down markedly for some considerable time,

this has a dramatic impact on the supply of younger used cars available to be sold.

The effect of the last four years' low new car volumes, and similar low forecasts, is

shown in the following chart which illustrates the striking change in the volumes of

cars in the various age group segments.

UK car parc segments; 2000 – 2015

4.344.07

3.893.853.823.883.984.38

4.584.624.865.055.155.09

4.754.42

5.74

5.795.866.056.19

6.546.847.01

7.297.557.567.28

6.856.57

6.436.25

5.87

6.226.566.856.81

7.087.317.31

7.056.65

6.396.266.085.79

5.535.29

14.9514.6714.24

13.6513.55

12.80

11.9511.60

11.2611.0610.9410.7810.9011.0311.0911.22

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

Millio

ns o

f ca

rs

0-2 years 3-5 years 6-8 years 9+ years

Source: SMMT/Buckingham

UK new car sales; 2000 – 2015

0.28

0.11

2.34

2.22 2.20

1.94

1.921.71

2.13

2.40

2.57

2.442.46

2.56 2.58

2.10

1.952.00

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Mill

ions

of

cars

New car sales Scrappage deals New car sales forecast

2.031.99


Used cars change hands four times on average before they are scrapped

UK Market Review


The report has shown that franchised and non-franchised used car retailers depend

on 0-5 year-old cars for 50% of their business and on cars in the 6-8 year age group

for a further 30% of their sales.

The chart shows there were 1.9 million fewer 0-5 year-old cars in the parc at the end

of 2011 compared with the pre-recession level at the end of 2007 – and 240,000

fewer units in the 6-8 year age group. The problem is, that while the supply of 0-5

year-old cars will remain relatively flat over the next three years, the stock of cars in

the 6-8 year group will drop by a further 900,000 units – adding up to three million

fewer 0-8 year old 'used cars in stock' than pre-recession times.

Taking a conservative used car 'parc turn' of 20%, this amounts to the loss of around

600,000 used cars sales per year in this critical age group, until substantially more

new cars are fed into the used car supply chain over several years.

Company car disposals to fall

While there have been reports of a growing shortage of good quality, first-time used

cars reaching the market, the full impact of the sharp fall and prolonged, low new car

volumes is yet to fully hit the used car market – as most of the new cars from the low

new car volume period are still with their first owners.

Disposals of 3-5 year-old fleet and business cars, which many retailers rely on for a

steady supply of used cars, illustrates this pattern of events.

Company car

disposals (used car

supply) in this

critical age group

held up well until

the end of 2011,

fuelled by record

high new fleet and

business sales

averaging 1.34

million units for five

years leading up to

2007.

From 2012,

company car

disposals in the 3-5 year age group will increasingly reflect much lower fleet and

business new car volumes, which fell steeply by some 350,000 to 980,000 units in

2009 and have recovered little since.

Fleet and business car disposals 3-5 year age group; 2006 – 2015

495,200

473,700

520,400 517,800503,500

495,000

415,300 408,600

432,200

451,500

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015


The full impact of the sharp fall and prolonged low new car volumes is yet to fully hit the used car market

UK Market Review


This will see company car disposals in this key age sector drop substantially over the

next two to three years, some 100,000 units lower than the peak of 520,000 reached

in 2008 – until such time as new fleet and business car volumes stage a marked

recovery.

Should the economy begin to show signs of recovery and/or car owners can't hold on

to their old car any longer, the growing shortage of younger used cars will become

more apparent as consumer demand rises.

Some initial conclusions

The UK Market Review portrays an industry in the midst of a long-term economic

downturn, with the impact of a lengthy period of low new car volumes flushing

through the used car supply chain. The impending and prolonged shortage of

younger used cars coming to market will take something like a decade to pass

through the system.

The following points might be considered:

Perhaps the strongest single message from this section of the report is the steep

climb in the average age of cars in the UK car parc. It has reached the highest

point for at least a quarter of a century at 7.44 years – up from 6.69 in 2004.

Could the average age of cars in the parc surpass eight years before it turns

around?

The used car market accounts for more than 55% of the value of car sales in the

United Kingdom and is £6.7billion greater than the new car market.

A change in buying patterns away from new cars to used cars as private buyers

seek to retain a ‘younger car’, but avoiding the greater expense of buying a new

one.

An increase in private-to-private sales suggests some sellers are seeking to cut

out the middleman or can no longer afford a younger vehicle.

The implications from the UK Market Review are significant in terms of franchised

dealer operations with less focus on new car sales and greater profit opportunities

from their used car activities. There is also a strong likelihood of reduced service

opportunities as the car parc continues to age, given that motorists tend to switch to

non-franchised outlets for maintenance when their car's warranty finishes.

The average age of cars has reached the highest point for a quarter of a century at 7.44 years


The Consumer Perspective

The Consumer Perspective section of the BCA Used Car Market Report looks at the

pattern of car ownership in the UK and the key issues that motorists take into

account when deciding what used car to buy and where to buy from.

BCA commissioned BMRB International to carry out face-to-face interviews with

4,000 car owners in the UK to identify their preferences and experiences in buying

and owning a used car – what persuaded them to buy their latest used car, what

influenced their choice of seller, what type of car they might buy next time they make

a change, where they might buy it, and when.

This year, the consumer research also looked at what type of car motorists might

look for during the current economic uncertainty, and how high the price of fuel

would need to be before they would think about buying a more fuel-efficient car

and/or changing their pattern of driving. Car owners were also asked if they had

taken any concerted steps to reduce their car running costs and how they prefer the

dealer they bought their car from to keep in touch with them.

Fieldwork for the BMRB consumer research took place during late March 2012.

The Consumer Experience section is split into four parts;

What Used Car to Buy? – looks at the issues which influence used car buyers’

decision on what car to consider buying and the crunch factors when deciding which

particular used car to buy.

Where to Buy From? – this part of the report considers what factors influence car

owners when choosing which dealer to buy their used car from, and what matters

most when buying from a franchised or non-franchised used car retailer. It also looks

at the pattern of car ownership in the country, why motorists buy a used car instead

of a new one, the type of used car they decided to buy – and how satisfied they are

with their purchase.

Dealer Relations and Buying Intentions – looks at used car retailers’ ongoing

relationship with their customers, when motorists might next be in the market for

another car, what type of car they plan to buy next and where they might buy from.

Fuel Prices, Economic Uncertainty and Car Running Costs – assesses what type

of car motorists might buy next time in the face of financial pressures and ongoing

economic uncertainty, and how they might combat the rising cost of fuel. It also looks

at what steps car owners have already taken to cut their motoring costs and what

they are prepared to do to cut their personal carbon footprint.

Car owners were asked if they had taken steps to reduce their car running costs



Part One – What Used Car to Buy?

What used car to buy next?

For the first time, 'views of friends and family', cited by 24% of car owners in this

year's survey, edged 'personal experience of make and model' (21%) into second

place when motorists thought about what used car they might buy next.

Influences on type of used car considered

2

4

4

4

6

6

8

8

8

10

12

15

21

24

16

Social media

Car TV shows

Dealer advice

Specialist motor mags

Car TV ads

General car mags

Newspaper adverts

Cars on street

Consumer reports

Dealer websites

Used car physical sites

Test drive

Independent Internet sites

Personal experience

Family & friends %

Source: BMRB

The influence of ‘independent Internet sites' increased from 12% to 16% of used cars

buyers this year, while 'used car sites/showrooms' (12%) and 'dealers' websites'

(10%) also had a part to play helping some used car shoppers decide which used car

to look for.

As in previous surveys, used car buyers are much less likely to be influenced by

'general car magazines', 'car TV adverts', 'dealer advice' or 'car TV shows', whilst

very few car owners felt 'social media' (Facebook or Twitter) could help their used car

buying deliberations.

Women (28%) depend more on the 'views of friends or family' than men (20%), who

rely on a blend of 'personal experience of make and model' (21%) and 'independent

car Internet sites' (16%) to settle on what car they might buy next.

While 'independent dealer websites' are important to a fifth of car buyers in the 25-34

year age group, they are not on 65 years-plus motorists' radar (5%). 'Consumer

reports' are of more interest to wealthier car owners and owners of cars in the

£15,000 plus band, who are also influenced more than others by a blend of 'personal

experience', 'test drive', 'used car showrooms/sites' and 'dealer advice'.

The influence of 'independent Internet sites' increased this year



'Crunch factors'

'Price' (41%), 'low mileage' (31%) and 'make and model', mentioned by 30% of

respondents, are firmly established as 'crunch factors' in deciding which particular

used car to buy – although 'engine size' (18%) and 'body type' (17%) can make the

difference on some occasions.

Critical factors in choosing a used car

41

31 30

1817

1412

108 8 7

3

0

5

10

15

20

25

30

35

40

45

%

Price

Low m

ileag

e

Mak

e/m

odel

Engine

size

Body t

ype

Age

Fuel

optio

n

Insur

ance

Specific

ation

Safety

Colour

Enviro

nmen

tal

Source: BMRB

Men and women have much the same views on the top-three 'crunch factors',

although 'age of vehicle' has more influence with women (18%) than men (11%).

However, the opposite is true for 'body type', cited as a factor by 19% of men but

just 14% of women.

While 'price' outstrips all other considerations for 56% of 17-24 year-olds and 50% of

low-income used car buyers, it only matters to three out of 10 older and wealthier car

owners who are more interested in the 'age of vehicle' and 'specification'.

‘Price’, which remains a top priority for half of motorists who bought a car for less

than £3,000, only makes a difference to a fifth of car buyers with cars in the £10,000

to £15,000 band and a quarter of those with cars priced over that mark. Owners of

cars costing more than £10,000 were more influenced by a mix of 'low mileage',

'make and model of vehicle', 'body type', 'age of vehicle and 'fuel option' that best

met their expectations.

Men and women have much the same views on the top-three 'crunch factors'



Part Two – Where to Buy From?

Which used car retailer to deal with?

Affordability tops motorists' priorities when deciding which used car retailer to buy a

car from. 'I got a good deal on the car' topped the shopping list for a third of survey

respondents, followed by 'the right car at the best possible price', which was in the

frame for three out of 10 of last year's used car buyers. A fifth of used car owners

look to 'trade in' their existing car and prefer to do business with a 'local dealer'.

Factors influencing choice of dealer

1

2

2

3

3

4

7

7

9

10

11

12

13

14

19

19

29

33

Dealer contact

Showroom facilities

Internet/onlline

Read about dealer

Low finance

Quick delivery

Easy negotiation

Aftersales

Recommended

Bought before

Wide choice

Friendly,helpful

Warranty

Reliable, trustworthy

Local

Trade-in

Right car, price

Good deal %

Source: BMRB

Dealer experience is also a prominent aspect of the buying process, in the form of

'the dealer appeared reliable and trustworthy' (14%) and 'staff are friendly, helpful

and professional', mentioned by 12% of used car owners.

There is little difference in men's and women's buying priorities in this year's survey.

Getting 'the right car at the best possible price' far outweighs all other considerations

for young used car buyers, who also rely more heavily on the 'dealer appeared

reliable and trustworthy' (32%).

The chief concern for two out of five wealthier car buyers is the 'dealer appeared

reliable and trustworthy', which is of little interest to low-income motorists (5%) who

are more focused on buying from a 'local and convenient' used car retailer (36%).

While 'the right car at the best possible price' tops the list for people buying cars

costing up to £10,000, other factors are more influential over that price level – 'trade

in', 'local dealer', 'friendly, helpful staff, 'dealer was recommended' and 'lack of sales

pressure' can sometimes play a key role in clinching the deal on higher value cars.

Dealer experience is a prominent aspect of the buying process



Buying from franchised and non-franchised dealers

Used car buyers are quite clear what they want from franchised dealers selling the

same make of car – two out of five expect a 'good deal on the car', 28% want the

'right car at the best possible price' and 25% 'look to trade in their old car'.

A little further down the list, some car owners head to a franchised dealer because of

their 'friendly, helpful and professional staff' (17%), or they have 'bought a car from

them before (16%).

Factors influencing choice of dealer

8

7

4

4

3

30

28

17

19

9

16

7

6

10

7

2

10

2

3

16

15

15

11

11

17

18

39

28

25

7

Got a good deal

Right car right price

Trade-in

Local

Friendly, helpful

Bought before

Reliable/trustworthy

Warranty

Lack of pressure

Range of choice

Aftersales

Quick delivery

Recommendation

Showroom facilities

Low finance

%

Franchised dealer same make

Used car retailer

Source: BMRB

Three out of 10 car owners who chose to buy from a non-franchised used car retailer

did so because 'they got a good deal on the car' and/or the dealer had 'the right car

at the best possible price', cited by 28% of this group this year. Dealing with 'friendly,

helpful and professional staff', or having 'bought a car from them before', is much

less of an concern for non-franchised used car retailers' customers than those who

had bought from a franchised point.

Three-quarters of motorists buy a used car

Twenty-four per cent of this year's consumer survey's respondents had bought a car

over the past two years, three-quarters of them choosing to buy a used car instead of

a new vehicle (see overleaf).

More men (26%) than women (23%) had bought a car in the past 24 months, 72% of

men and 77% of women opting to buy a used car rather than a new one.

Dealing with 'friendly, helpful staff' is less of a concern for non-franchised retailers' customers



Cars bought over past two years – by age group

2426

23

16

2832

27

16

28

7477

80

87

81

7072

6064

0

10

20

30

40

50

60

70

80

90

All ages Men Women 17-24 25-34 35-44 45-54 55-64 65+

Age

%

% bought car in last two years % of these bought used

Source: BMRB

Motorists in the 35-44 year age group were the top buyers of cars on this occasion; a

third of them buying a car during the past two years, compared with just 16% of 17-

24 year-olds and 65 years-plus car owners. Nearly nine out of ten 25-35 year-olds

(87%), and 81% of those in the 35-44 age group, chose to buy a used car, in

contrast to just 60% of older motorists.

While three out of 10 wealthier car owners had bought a car in the previous two

years, just one in 10 low-income families followed suit, 67% of the former opting for a

used car compared to 85% of the latter.

Seven out of 10 families own a car

Similar to last year, seven out of 10 families (72%) own at least one car (see overleaf)

– 5% fewer, though, than two years ago, as the effects of the second recession in

four years, high inflation and rising fuel and maintenance costs has badly eroded car

owners' disposable incomes.

Households of car owners in the 35-54 age group have the most cars in their

families, 83% of them have at least one car, 30% of them owning two cars. The

lowest car ownership is found in 65 years plus and low-income households, where

just 62% of the former and 37% of the latter run a car.

A third of wealthier families own two cars, 9% of them in the three-car family bracket

– mostly those in the 45-54 year age group with a high percentage of used cars

costing more than £10,000.

Motorists in the 35-44 year age group were the top buyers of cars



Four years of economic

downturn and financial

hardship has seen the

number of families

without a car rise five

points to 28% over the

past two years. Two-

car households

dropped 3% to 22%,

and the number of

three-car families fell

from 8% to 5% of

households during the

same period.

Hatchbacks and saloons most popular

Hatchbacks (47%) and

saloons (22%) remain

motorists' most popular

used cars, taking the

same share of the

market as last year.

Apart from MPVs,

which saw their share

rise from 6% to 10% in

2012, demand for other

variants was stable

year on year.

Women (52%) favour

hatchbacks more than

men (43%), who have more appetite for MPVs/People Carriers (12%) than women, at

7%. While a fifth of motorists in the 35-44 year group opt for an MPV, mostly in the

£10,000-£15,000 band, estate cars find favour with 55-64 year-olds, and saloons are

preferred by three out of 10 older motorists.

Estates and MPVs are twice as popular in the £10,000 to £15,000 price band, while

Sports Cars/Coupe and Prestige variants are favoured most by used car buyers

spending £20,000 plus.

Cars in the household

Two22%

Three or more4%

One45%

None28%

Source: BMRB

Type of used car bought

Hatchback47%

Saloon22%

Prestige1%

Micro/City2%

MPV10%

Sports/Coupe4%Off-road

4%

Other3%

Estate7%

Source: BMRB

Four years of economic downturn has seen the number of families without a car rise four points to 28%



Buying used rather than new

Reasons for buying

a used car rather a

new one are firmly

established. A third

of car owners said

'I couldn't afford a

new car', a fifth

believe 'used cars

offer better value

for money', and

14% of motorists

are convinced

'there is lower

depreciation with

used cars'.

While a quarter of

men and a fifth of women said 'used cars offer better value for money', more women

(38%) than men (30%) said 'they couldn't afford a new car'.

Two-fifths of car owners between 17 and 34 years of age and low-income motorists

bought a used car because 'they were unable to afford a new one', in contrast to just

one fifth of older and wealthier motorists who found themselves in a similar position.

55-64 year-olds believe more strongly than other groups that 'used cars provide

better value for money' (28%) and 'there is lower depreciation with used cars' (23%).

While ‘I couldn’t afford a new car’ is the major influence in buying a used car costing

up to £5,000, it is of little concern for car owners who paid £10,000 to £15,000 for

their last used car (8%) – and those who bought more expensive vehicles (12%).

Sales of used diesels stall

Diesel-engined cars’ used car market share dipped to 33% this year from 34% in

2011 and 36% in 2010 – as fewer fleet vehicles from 2009's low new car volumes,

reached the marketplace and more private used car buyers looked towards smaller,

petrol-driven models.

Diesel new car volumes climbed four percentage points to 50.6% of the new car

market in 2011; rising 4.8% to 981,594 units, driven by higher sales (4.7%) to fleet

operators and a 14% drop in private sector new car volumes.

Fleet operators dominate the diesel new car market. Diesels accounted for close to

two-thirds (63.2%) of new cars sold to the 25-plus fleet sector in 2011 (644,230

units), compared with just 36.6% of private new car volumes – 337,364 units.

Buying new or used?

4

6

11

14

21

34

More choice

Needed quickly

Always buy used

Depreciation

Better value

Couldn't afford new %

Source: BMRB

Diesel-engined cars' used car market share dipped to 33% this year



Motorists in the 35-44 year age group are the biggest diesel buyers, 41% of them

choosing a diesel-engined used car last time, as did 35% of wealthier used car

buyers. Diesels remain a less attractive proposition for 65 year-plus (24%) and low-

income (21%) used car owners many of whom prefer a smaller, petrol vehicle.

The high fleet and

premium sectors'

diesel new car

content can be

seen in the

£10,000 to

£15,000 used car

band – where two

thirds of vehicles

bought run on

diesel, as do seven

out of 10 used

cars priced

between £15,000

and £20,000.

Although 'better fuel consumption' still tops the reasons for buying a diesel used car,

the number of car owners citing this dropped to 57% compared with 68% in last

year's consumer survey – as petrol-engined cars become more frugal on the fuel

front and the significant diesel/petrol price gap remains. A quarter of used car buyers

believe a diesel is a 'more reliable engine', while nearly a fifth are confident this type

of used car 'maintains its value better'.

Used car satisfaction rises once more

Used car owners'

satisfaction with their

used car rose two

points to 95% this year

– 67% of them saying

they were 'very

satisfied' and 28%

'quite satisfied'.

The number of 17-24

year-old used car

owners, 'very satisfied'

with their car, jumped

10% to a high of 68%

this year, with a further

21% 'quite satisfied'.

Reasons for buying diesel

57

24

18

8 86

0

10

20

30

40

50

60%

Fuelconsumption

More reliableengine

Maintainsvalue

Engine lastslonger

High mileage Environment

Source: BMRB

Used car satisfaction

Quite dissatisfied2%

Neither2%

Quite satisfied28%

Very dissatisfied 1%

Very satisfied67%

Source: BMRB

Used car owners' satisfaction with their used car rose two points to 95%



Used car satisfaction within all other age groups is well over the 90% mark, topped

by 55-64 year-olds and 65 plus motorists at 98% and 97% respectively – with

wealthiest used car buyers the most satisfied contingent at 99%. Although 92% of

low-income used car owner declared they were 'satisfied with their car, just 55%

claimed to be 'very satisfied' compared with the average of 67% – suggesting many

in this group run older vehicles.

The number of car owners ‘satisfied’ with their used car also rises in line with

purchase price – reaching 96% for cars costing between £5,000 and £10,000, 97%

between the £10,000 and £15,000 mark – and 100% for cars priced over £20,000.



Part Three – Dealer Relations and Buying Intentions

Used car customer follow up

The BCA consumer survey asks used car owners if the dealer they bought their car

from, keeps in touch to see if they are satisfied with their vehicle, are interested in

servicing their car, or might be thinking of buying another car. This year's results

show that just 52% car owners had heard from their selling dealer since they bought

their car, compared to 56% in last year's survey.

Overall, the

percentage of

used car

customers

contacted by

dealers to find out

if they 'were

satisfied with their

car' or were

interested in

'having it serviced'

both fell to their

lowest point in the

survey's history.

'Satisfaction' calls

dropped 3% to

27% while

'servicing' was 4% lower at 31%.

Franchised dealers selling the same make of used car have a much better record on

customer contact than their non-franchised counterparts; 73% kept in touch with

their used car buyers compared with 40% of independent dealers, 57% versus 18%

on servicing' and 13% versus just 4% to see if the owner might be 'interested in

buying another car'.

17-24 year-old car owners and low-income motorists are least likely to hear from the

retailer they bought their car from – three out of five saying they had heard nothing

since they took delivery of their vehicle. Used car buyers in the 55 years plus group

and wealthier motorists are most likely to be approached about 'servicing their car' or

if they 'might be interested in buying another vehicle' – the latter aspect unheard of

by low-income car owners.

Eighty-five per cent of owners of cars costing between £10,000 and £15,000 had

heard from their supplying dealer, three out of five about 'servicing' and a fifth on the

topic of 'changing their car'.

Dealer contact with used car customers

31

1

73

57

13

4

1818

40

4

0

10

20

30

40

50

60

70

80

Contact Servicing car Satisfied with car Change car Sell tofriend/family

%

Franchised dealer same make Non-franchised dealer

Source: BMRB

The percentage of used car customers contacted by dealers to find out if they were satisfied fell to its lowest point



Buying a car in the next year?

Car owners are

clearly not immune

from the impact of

the long-running

spell of financial

pressures,

recession or

gloomy economic

outlook. This

year's consumer

research shows a

significant drop in

the number of car

owners who think

they will 'certainly'

or 'quite likely' buy a car in the next 12 months – down 3% to 11% in 2012 from 14%

last year. The number of motorists who believe there is a '50:50 chance' they will buy

a car in the next year edged up one point to 9%.

Men are more likely to buy a car in the next 12 months than women, 13% of the

former feel they will 'certainly' or 'quite likely' do so, compared with just 10% of

women. Sixteen per cent of 35-44 year-olds feel they might buy a used car in the

next year in contrast to just 3% of 65 years-plus motorists – while a fifth of car

owners who bought a used car in the £10,000 to £20,000 band, and 35% of those

with cars in the £20,000 group, feel they might follow suit.

What type of car to buy next?

Three-quarters of

car owners intend

to replace their car

with a used one

when they make a

change. However,

there has been a

swing of 4%

towards diesel this

time – 30% of

prospective used

car buyers saying

they plan to go in

this direction next

time – a long way

short though of

diesels' current 50% plus share of the new car market.

Likelihood of buying a car in the next year

3

8 9

26

20

30

3

0

5

10

15

20

25

30

%

Certainlywill

Quitelikely

50:50chance

Unlikely Certainlynot

Won'tbuy again

Don'tknow

Source: BMRB

Next car bought will be

12

1

1

3

3

4

7

27

40

Don't Know

Used car alternative

Used car hybrid

Nearly new petrol

Nearly new diesel

New car diesel

New car petrol

Used car diesel

Used car petrol %

Source: BMRB

Three-quarters of car owners intend to replace their car with a used one



While four out of five car owners in the 25-34 age group plan to buy a used car next

time they replace their car, a third looking for a diesel, only 62% of older motorists

are planning a similar move, just 17% heading in the diesel direction. The biggest

potential buyers of a used car are those who spent £5,000- £10,000 last time (92%),

and owners of used cars that cost between £15,000 and £20,000 (88%).

Where to buy the next car?

While some car owners might consider more than one option, the number of

respondents saying they will deal with a franchised dealer next time rose by 5% to

50% in this year's survey, half of them planning to trade in their old car. Other

potential used car sources remain unchanged; 30% of motorists have in mind buying

privately or from a friend, while a further 13% are considering doing business with a

non-franchised used car retailer.

Nearly three out of

five car owners

over the age of 35

say a franchised

dealer will be their

first port of call

when they get

round to buying a

used car to replace

their current

vehicle – which

rises to seven out

of 10 in the case of

better-off used car

buyers.

Two out of five 17-

24 year-olds and

low-income car buyers say they will buy privately or from a member of their family

next time, as will half of buyers of cars in the £1,000 to £3,000 band. On the other

hand, three out of five owners of cars costing between £10,000 and £15,000 are

intent on doing business with a franchised dealer.

Where next car will be bought

13

7

6

5

4

3

12

22

50

Don't know

Other

Auction

Car supermarket

Family friend

Internet trader

Used car dealer

Private

Franchised dealer %

Source: BMRB

The number of respondents saying they will deal with a franchised dealer next time rose by 5%



Part Four – Economic Recovery, Running Costs and

Keeping in Touch with Customers,

What car to buy during an economic recovery?

The economy is in the midst of a double-dip recession, prices of essential goods and

fuel have spiralled in recent years, and unemployment is uncomfortably high. The

Governor of the Bank of England, Mervyn King, predicts it could take five more years

for a full economic recovery – three years longer than he originally expected.

Faced with this gloomy outlook, what type of car might car owners consider buying to

help them offset financial pressures? The answer? The 'status quo' is under severe

threat.

Buying a car during slow economic recovery

2

2

3

5

8

9

9

12

13

14

14

20

27

Bigger car

New instead of used

Low interest loan

Lower depreciation

Best part-exchange price

Same type of car

Used instead of new

Lower maintenance

Lower CO2

Best purchase price

Smaller car

Lower road tax

Better fuel consumption %

Source: BMRB International

Just 9% of car owners say they will 'buy the same car again', down from 14% last

year and 20% who expressed this view in 2010. Simple arithmetic, therefore,

suggests that nine out of 10 motorists intend to replace their car with a different type

of vehicle next time.

Top of the shopping list are 'a car with better fuel consumption', 'lower road tax', 'a

smaller car' 'best purchase price' and 'lower CO2' – all things that used car buyers

have a great deal of control over. Significant progress on all or most of these

measures could produce dramatic savings.

.

Just 9% of car owners say they will 'buy the same car again'



There remains little difference between men and women, and across the age and

social groups, on what steps motorists might take to protect their motoring needs

and withstand the 'slings and arrows' of the country's economy

Men (29%) appear more intent than women (24%) on changing to a 'car with better

fuel consumption', a step too far, though, for the vast majority of younger car owners,

just 16% of whom said this is tolerable. On the price front, people with cars in the

£10,000 to £15,000 group, are more resolved than others to cut costs when they

replace their car. A third of them are considering a move to 'a car with better fuel

consumption' and/or one with 'a lower road tax', while a quarter are thinking about

'buying a used car rather a new one' and/or negotiating 'the best possible price'.

Reducing personal motoring carbon footprint

The number of cars owners prepared to take steps to cut their personal carbon

footprint rose to 94% this time. Support for such measures is wide spread with the

exception of 65 years-plus (76%) and low-income respondents (72%).

Steps to reduce personal motoring carbon footprint

16

6

6

9

9

10

13

14

15

15

15

15

16

16

21

29

No action

Drive off-peak times

Work from home

Cycle more often

Car share

Switch off air conditioning

Use public transport more

Accelerate less quickly

Avoid heavy braking

Avoid short trips

Buy smaller car

Car with lower emissions

Reduce annual mileage

Drive more slowly

Cut journeys

Walk more often %

Source: BMRB

'Walking more often' and 'cutting the number of journeys', favoured by 29% and 21%

of car owners respectively, top the list of measures motorists have in mind to cut

their personal CO2 – with other steps such as 'driving more slowly', 'reducing annual

mileage', 'buying a car with lower emissions' and 'buying a smaller car' also in the

frame.

Men appear more intent than women on changing to a 'car with better fuel consumption'



Women (33%) are more likely to 'walk more often' than men at 24%. However, when

it comes to 'driving more slowly', 19% of men cite this as one of their contributions to

offset the threat of climate change compared with just 13% of women.

Surprisingly, owners of higher value cars (in the £15,000 to £20,000 price group) are

the most determined eco warriors. Three out of 10 have vowed to 'cut the number of

journeys', 'avoid heavy braking', 'switch off air conditioning when possible' and 'car

share whenever possible' – while a third have in mind 'cutting unnecessary journeys'.

Offsetting the rising cost of fuel

AA statistics show that, at June 2012, the UK has the 10th highest unleaded fuel

price in Europe (12th last year) – and the second highest pump price for diesel.

By June 2012, the average price for unleaded fuel had dropped three pence, year on

year, to an average of 133.8 ppl, while the price for diesel was virtually the same as

that 12 months earlier at 139.3 ppl. What shouldn't be overlooked, of course, is

today's fuel prices represent a 50 pence per litre hike for petrol and 40 pence rise for

diesel in a little over three years – a heavy burden on private motorists in particular.

It is fair to assume that fuel prices will rise considerably in the long term as global

demand pushes up refinery prices, and the government returns to increasing fuel tax

to fill the huge 'black hole' in motor taxes on the horizon from lower CO2 emissions.

So how high will fuel prices need to be before motorist are forced to consider

switching to a more fuel-efficient car and/or alter their driving pattern?

Fuel price to force change of car or pattern of driving

47

8

8

1

5

3

10

3

4

3

47

8

7

1

5

2

10

3

5

4

98

No effect

Don't Know

£1.70 plus per litre

£1.65 per litre

£1.60 per litre

£1.55 per litre

£1.50 per litre

£1.45 per litre

£1.40 per litre

£1.35 per litre

£1.30 per litre

%

Change car Pattern of driving

Source: BMRB

Owners of higher value cars are the most determined eco warriors



Over half of this year's respondents (53%), believe the higher price of fuel will

eventually push them into 'buying a more fuel efficient vehicle' or change their 'driving

habits' – or both. The only groups who feel less inclined to make a change are 65

years plus car owners, who are probably less affected because their annual mileage

is lower and many already run smaller, more economical cars.

Car owners most concerned by the prospect of much higher fuel prices are 17-24

year-olds (65%), in complete contrast to owners of cars costing over £20,000 – who

might share others views on fuel-efficient vehicles, but have no intention of changing

their driving habits.

Steps taken to cut car running costs

As average earnings continued to run well behind inflation, many families are having

to count their pennies and look for substantial savings in their household expenditure,

not least in their car running costs.

Steps taken to substantially cut car running costs

2

3

4

4

5

7

9

11

11

12

12

14

16

22

17

Lower cost service provider

Fewer cars in the household

Lower insurance premium

DIY service\repairs

Close windows when possible

Shorter trips

Change to car lower insurance

More fuel--efficient car

Use public transport

Switch off air conditioning

Bought a smaller car

Accelerate less quickly

Avoid heavy breaking

Drive more slowly

Tyres at right pressure %

Source: BMRB

In this regard, 70% of car owners said they had already taken some steps to cut their

car operating costs. While the leading measures adopted might appear somewhat

lightweight in their own right, together 'keeping tyres at the right pressure' (22%),

driving more slowly' (17%), 'avoiding heavy braking' (16%) and 'accelerating less

quickly' (14%) can deliver meaningful, long-term savings.

While men were keen to make progress on these top-four measures, more women

(14%) had changed to a smaller car than men (10%).

Owners of cars costing over £20,000 have no intention of changing their driving habits



Few younger drivers have taken practical steps to cut their motoring costs, unlike

owners of cars costing between £15,000 and £20,000 – half of them are 'keeping

their tyres at the right pressure', three out of five 'are avoiding heavy braking' and a

fifth are 'accelerating less quickly'.

Keeping customers in the loop

There has been considerable attention given recently to Customer Relationship

Management (CRM) – or how motor retailers should best communicate with their

customers.

In this regard, the spotlight has been fixed firmly on websites, email and social media

such as Facebook and Twitter. However, the focus seems to have been rather one

sided – concentrating purely on how retailers could fully exploit all manner of high-

tech techniques to sell more cars and aftersales and satisfy and retain more

customers.

In a world where consumers are subjected to a barrage of often aggressive 'sales

intrusions' through their PC, down their telephone line or through their letter box, how

do used car owners want their selling dealer to keep in touch with them?

To this end, this year's BCA consumer survey asked used car owners 'how do you

prefer to be kept informed of new or used car sales offers, servicing and other

opportunities by the dealer you bought your latest car from?'.

Keeping in touch – customers' preferences

28

13

1

1

1

2

4

6

9

14

15

18

Don't know

Other

Text message

Facebook

Twitter

Radio

Telephone call

TV

Press

Website information

Letter\mailing

Email %

Source: BMRB



Car owners show a clear preference for receiving the least invasive type of

communication; ones they can read and absorb when it suits them and not the

sender – which can be extensive, if needs be, and can be retained and returned to at

leisure. Email leads the field in this respect, cited by 18% of survey respondents,

followed by the 'written word' in the form of letters/mailing and websites at 15% and

14% respectively.

Motorists appear to dislike incoming telephone sales calls and, despite the fervour for

social media in the manufacturer and retailer arena, they seem to have little

enthusiasm for being kept up to date by Twitter or Facebook – or, for that matter, by

text messaging.

Car owners in the 25-44 year group much prefer email or surfing websites to other

forms of communication, while men (17%) lean more towards websites than women

at 11%. Email is the outright winner for people with used cars costing more than

£10,000, while owners of cars in the £20,000 plus band also appreciate being kept

up to date by letter and website.

A good deal is still the critical factor

The Consumer Perspective section suggests car owners resist any form of sales

pressure, with better-informed, buyers and prospects seeking to gain the initiative

during the buying process.

Car buyers are making an expensive acquisition – as well their personal

experience, many are seeking advice from family and friends and increasingly

trawling independent, dealer and manufacturer websites to build up a

comprehensive 'case file'.

A good deal is still the critical factor – indeed, the crunch issue in many cases –

but the decision is more complex than just price; the buyer wants a top-class

blend of service and experience.

Three-quarters of car owners buy a used car rather than a new one - is the effort

put into selling used cars as strong and professional as that associated with new

car sales?

While diesel-engined new cars are overridingly popular, in the long term they will

could become less popular as used cars, unless would-be buyers can truly justify

the significantly higher price by greater fuel economy or genuine economic

benefit.

Motorists appear to dislike incoming telephone sales calls


Regional Review

The BMRB consumer research provides a useful insight into the pattern of car

owners' buying and owning experiences across the UK regions.

This year's consumer survey shows that a third of Welsh motorists had bought a new

or used car during the past 24 months, followed by three out 10 East Anglian,

Northern and Scottish car owners. London remains the lowest car buying region per

head, just 15% of respondents living there had bought a new or used car in the past

two years, compared to 11% in the previous year's survey.

Car bought over past two years

15

25

26

33

31

21

23

26

22

30

29

London

South East

South West

Wales

East Anglia

East Midlands

West Midlands

Yorks/Humb

North West

North

Scotland

%

Source: BMRB

West Midlands topped the used car buying table this year; 84% of car buyers opting

for a used car last time they changed their vehicle, as did 82% of East Anglian car

owners. Just three out of five Scottish and London motorists had bought a used car,

last time, in contrast to three-quarters of car owners living in Yorkshire/Humberside,

the East Midlands, Wales and the South West.

‘Friends and family’ holds more influence this year

‘Personal experience of make/model’ is the outright winner for East Anglian car

buyers (55%) when considering what car to buy and for 36% of Northern motorists

(see overleaf). The influence of 'friends and family' is stronger this year; top of the list

for car owners in seven of the 11 UK regions when making up their mind what type of

car to consider buying.

'Independent Internet sites' holds more sway in the West Midlands (23%), Yorkshire

and Humberside (18%) and the South East, also 18%, than other areas of the country

– while taking a 'test drive' is an influential factor for a third of car owners in East

Anglia.

'Personal experience of make/model' is the outright winner

Regional Review


Considering what car to look for

1721

13

27

19

29

17

36

55

15

10

18

22

35

24

25

26

20

31

22

31

18

20

10

13

22

23

17

15

18

14

10

16

London

South East

South West

Wales

East Anglia

East Midlands

West Midlands

Yorks/Humb

North West

North

Scotland

%

Personal experience Friends/Family Internet sites

Source: BMRB

Dealer follow-up calls

In terms of overall contact with customers, seven out of 10 used car owners living in

the North and East Midlands had heard from their selling dealer since taking delivery

of their used car, whereas just two out of five motorists in Yorkshire, Humberside, the

South West and London could recall any type of contact. The following chart looks at

the pattern of dealers' satisfaction and sales calls across the country.

Dealers' customer satisfaction and sales calls

234

18

33

22

18

25

29

26

8

18

29

17

4

2

8

13

17

25

11

7

2London

South East

South West

Wales

East Anglia

East Mids

West Mids

Yorks/Humb

North West

North

Scotland

%

Satisfaction Call Sales Call

Source: BMRB

Regional Review


A third of South Eastern used car buyers had been asked if they were 'satisfied' with

their car, while three out of 10 East Midlands' and Northern motorists had also been

approached on this front.

A quarter of used car owners living in Wales and East Anglia had been approached

about perhaps 'buying another car', but this type of initiative was almost unheard of

in Scotland, the North West and London.

When to buy the next car?

The number of car owners who say they will 'certainly' or 'quite likely' buy a car in the

coming 12 months is highest in Wales and the West Midlands (16%) – and least likely

in the North West and Scotland, where just 7% of this year's survey respondents felt

the same way.

Buying a car in the next 12 months

1

4

1

2

4

7

2

6

1

2

1

8

6

9

10

9

12

9

7

10

7

5

4

10

8

5

12

12

8

6

14

16

10

80

81

81

77

80

83

75

79

83

76

77

London

South East

South West

Wales

East Anglia

East Midlands

West Midlands

Yorks/Humb

North West

North

Scotland

%

Certainly Quite likely 50/50 Unlikely/Not

Source: BMRB

Sixteen per cent of Northern and 15% of North Western car owners said they felt it

was '50/50' whether they would buy a car in the coming year, while just 17% of

Scottish and Yorkshire/Humberside motorists said there was any chance of them

'buying a car at all' in the next 12 months.

Where to buy the next car?

The popularity of franchised dealers has risen in this year's survey; more than half of

car owners in six of the 11 UK regions planning to go in this direction next time they

replace their car – particularly so in Yorkshire/Humberside where 70% of motorists

say a franchised dealer will be their first port of call (see overleaf).

Popularity of franchised dealers has risen

Regional Review


Where to buy the next car

567

24

47

46

70

52

55

54

44

35

57

39

18

11

16

14

15

30

7

18

11

10

20

27

26

24

37

42

23

28

28

26

London

South East

South West

Wales

East Anglia

East Midlands

West Midlands

Yorks/Humb

North West

North

Scotland

%

Franchised dealer Non-franchised dealer Private/family

Source: BMRB

‘Non-franchised used car retailers’ are favoured more in East Anglia (30%) the North

(18%) and the South West (18%) than other UK regions. On the other hand, 42% of

Londoners, 37% of motorists in the East Midlands, and 28% of East Anglian and

South Western car owners plan to buy ‘privately’ or from a ‘friend or family member’

when they next change their car.

What car to buy next?

What type of car next?

66

76

72

58

60

74

82

72

57

70

82

9

5

5

4

12

16

2

6

7

7

4 4

9

21

10

3

17

10

7

10

11

16

10

9

17

13

13

20

13

14

15

12

London

South East

South West

Wales

East Anglia

East Midlands

West Midlands

Yorks/Humb

North West

North

Scotland

%

Used car Nearly new New car Don't know

Source: BMRB

Regional Review


Four out of five East Midlands and Northern car owners plan to buy a used car next

time they change, as do three-quarters of motorists living in the South West and East

Anglia. Nearly-new cars are more the province of prospective car buyers in East

Anglia (16%) and Wales (12%), but of little interest to motorists in the East Midlands,

where just 2% are considering such a move.

Buying a new car appeals to 17% of car owners in London and 16% in Scotland, but

much less so to motorists living in the East Midlands and the North of England.

How satisfied are used car owners?

The most satisfied car owners, overall, are Londoners, 99% of whom said they were

either ‘very satisfied’ or ‘quite satisfied’ with their used car – followed very closely by

98% of respondents living in East Anglia and Yorkshire/Humberside. In contrast, only

87% of South Western motorists were happy with their used car, 73% 'very satisfied'

and just 14% in the 'quite satisfied' bracket.

While three-quarters of Welsh, East Anglian and Northern used car buyers said they

were 'very satisfied' with their car, as is now customary, fewer used car buyers living

in London (57%) said they felt the same about their latest used vehicle.

Very satisfied and quite satisfied used car owners

59

75

62

67

70

61

75

75

73

70

57

37

18

31

31

26

35

23

20

14

26

42

Scotland

North

North West

Yorks/Humb

West Midlands

East Midlands

East Anglia

Wales

South West

South East

London %

Very satisfied Quite satisfied

Source: BMRB

Buying a new car appeals less to motorists living in the East Midlands and the North

Regional Review


Cutting back on car running costs

This year's consumer survey asked car owners what steps they had already taken to

substantially curtail costs of running their new or used car.

Steps to substantially cut car running costs

2914

19

21

16

13

24

29

22

23

28

28

18

18

16

21

4

38

18

16

13

18

23

15

36

21

13

11

11

23

15

15

15

London

South East

South West

Wales

East Anglia

East Midlands

West Midlands

Yorks/Humb

North West

North

Scotland

%

Tyre pressure Drive more slowly Avoid heavy braking

Source: BMRB

Four out of five car owners in Scotland and Yorkshire/Humberside have already made

inroads into their car running costs, compared with just three out of five of their

contemporaries in London and the South East,

A blend of 'keeping tyres at the correct pressure', 'driving more slowly', 'avoiding

heavy braking', and 'accelerating less quickly' has proved the most popular and

practical measures for Scottish and East Anglian motorists.

On the other hand, very few car owners in London and the South East have chosen

to 'keep tyres at the right pressure' or 'accelerate less quickly' as a way of saving

money on motoring.


European Overview This section of the Used Car Market Report looks at new and used car markets in key

European states which make up the EU27, plus the three European Free Trade

Association countries (EFTA). Western Europe is the original EU15 states plus EFTA.

EU15 Austria, Belgium, Denmark, Finland, France, Greece, Germany, Ireland, Italy,

Luxembourg, the Netherlands, Portugal, Spain, Sweden, the UK

EU25 EU15 plus the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland,

Slovakia, Slovenia

EU27 EU 25 plus Bulgaria, Romania

EFTA3 Iceland, Norway, Switzerland

Western Europe EU15 plus EFTA3

Europe has a population of 500 million and a car parc of some 236 million passenger

cars, 199 million of them in Western European countries. According to ACEA (European

Automobile Manufacturers Association), Europe has 3.5 million people involved in

automotive manufacturing, accounting for a quarter of worldwide passenger car

production.

New car market

Europe's new car registrations hit an all-time high of 16 million units in 2007, falling to

14.7 million in 2008 in the face of recession. While wide-spread scrappage incentive

schemes held new car volumes at 14.5 million in 2009, they fell to 13.8 million and 13.6

million respectively in 2010 and 2011 – some two million units below the average for the

five years prior to the 2008/2009 economic downturn.

European new car volumes ; EU27 plus EFTA 2003 - 2011

15.8

15.115.3 15.3

13.613.8

14.514.7

16.0

10

11

12

13

14

15

16

17

2003 2004 2005 2006 2007 2008 2009 2010 2011

Mill

ions

of ca

rs

Source: ACEA

European Overview


Western Europe's (EU15/EFTA) new car sales, which accounted for 94.4% of the

EU27 total, fell 1.3% to 12.81 million in 2011, while the EU's 'new member states'

saw their new car volumes drop 2.9% to 706,706 units last year.

EU15 markets

Of the major European major markets, only Germany saw its new car sales rise in

2011, by 8.8% to 3.17 million, stretching its lead at the top of the European new car

sales table. Second-placed France saw its new car volumes fall 2.1%, as did other

major markets – the UK (-4.4%), Italy (-10.9%) and Spain (-17.7%).

EU15 new car registrations; 2011

3.17

2.20

1.941.75

0.81

0.57 0.570.36 0.30

0.17 0.15 0.13 0.10 0.09 0.050.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

Mill

ions

German

y

Fran

ce UKIta

lySpain

Belgium

Nethe

rland

s

Austri

a

Sweden

Denmar

k

Portug

al

Finlan

d

Greece

Irelan

d

Luxe

mbu

rg

Source: ACEA

Greece and Portugal, down by 31% and 31.3% respectively, also experienced a

marked fall in new car volumes in 2011. Western European markets with stronger

new car sales in 2011 were Austria (8.4%), Denmark (9.7%) and Norway (8.3%).

The German new car market proved more resilient than other major EU markets

in 2011, its new car sales rising 8.8% to 3.17 million last year – much in line with

2007's pre-recession volumes – see overleaf. The French new car market, on the

other hand, slipped by 2.1% to 2.2 million in 2011, retaining second place in the

European new car sales league.

In a struggling economy, Italian new car sales tumbled by a further 10.9% to 1.75

million in 2011, three-quarters of a million units fewer than the 2.5 million

recorded in 2007. Spain saw its new car market suffer the biggest drop of the

EU's major markets in 2011, falling 17.7% and 173,956 units to 808,059, around

half the level of new car sales reached five years earlier.

The German new car market has proved more resilient than other major EU markets

European Overview


New car sales major EU markets; 2002 - 2011

2.202.252.27

2.152.01 2.01 2.07 2.00 2.06 2.05

3.172.91

3.81

3.25 3.24 3.27 3.323.47

3.153.09

1.751.96

2.28

2.25 2.26 2.24 2.33

2.50

2.162.16

0.810.980.95

1.381.33

1.52 1.531.63 1.61

1.16

1.942.03

2.442.34

2.572.582.56

1.99

2.402.13

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Mill

ions

of

units

France Germany Italy Spain United Kingdom

Source: ACEA

UK new car market volumes fell 4.4% to 1.94 million in 2011, consolidating its

third place in the European new car sales league.

The major markets of France, Germany, Italy, Spain and the UK accounted for 72.8%

of overall EU new car registrations in 2011, compared with 73.6% in 2010 – as just

Germany recorded a rise in new car volumes last year.

New member states

New car sales new EU member states, 2011

277.4

173.3

81.768.2

58.445.1

19.1 15.4 13.2 8.8

0

50

100

150

200

250

300

Polan

d

Czech

Rep

l

Roman

ia

Slov

akia

Slov

enia

Hunga

ry

Bulgar

ia

Esto

nia

Lithu

ania

Latvi

a

Tho

usan

ds

Source: ACEA

European Overview


Eastern European new car markets had mixed results in 2011. Poland's new car

volumes fell 12.2% to 277,430, while the Czech Republic saw its new car sales rise

2.4% to 173,282 units. However, Hungary and Slovakia fared better last year – the

former's sales were 3.7% higher at 45,097, while the latter's were up 6.5% to 68,203

units.

Used car volumes

Overall European used car volumes are considerably higher than EU new car sales;

indeed the five major markets in this report alone account for over 23 million used car

sales annually.

Used car volumes, 2011

6.76.4

5.5

2.8

1.81.6

10.8 0.8 0.8

0.5

0

1

2

3

4

5

6

7

Mill

ions

UK

German

y

Franc

eIta

ly

Netherl

ands

Spain

Sweden

Austria

Belgium

Portug

al

Denmark

Source: National Trade Bodies

The major EU used car market trends' chart, overleaf, shows UK used car volumes

fluctuated somewhat over the past 10 years – from a high of 7.4 million units in 2006

to 6.3 million as recession hit used car sales hard in 2009.

As the economy struggled to recover, UK used car sales edged up to 6.6 million in

2010 and 6.7 million units in 2011, securing first place in Europe’s used car sales

league.

Germany’s used car market volumes, which had fallen steadily for a decade, staged a

recovery, rising 400,000 to 6.4 million units in 2010 and 2011. French and Spanish

used car sales have also recovered from the economic downturn, the former settling

at 5.5 million units for the past two years – while the latter rose 300,000 units to 1.7

million units in 2010, slipping back to 1.6 million the following year.

The UK secured first place in Europe's used car sales league

European Overview


Used car volumes major markets, 2002 - 2011

5.45.65.55.45.45.35.5

5.25.5 5.5

6.16.3

6.76.6

6.86.86.8

6.0

6.4 6.4

3.22.9

3.23.12.92.9

3.02.7 2.8 2.8

1.51.71.61.6

1.41.7

1.21.4

1.7 1.6

6.7

7.1

6.36.6 7.2

6.8

7.47.3

6.66.7

0

1

2

3

4

5

6

7

8

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Mill

ions



While Italian used car volumes, have remained relatively flat since 2009 at 2.8 million,

they are some way short of the high of 3.2 million reached in 2007 and 2008.

Car parc

Parc sizes, 2009

42.9

36.5

31.4 30.4

22.0

7.6

5.2 4.5 4.4 4.32.1

0

5

10

15

20

25

30

35

40

45

Mill

ions

German

yIta

ly

Fran

ce UKSpain

Nethe

rland

s

Belgium

Portug

al

Austri

a

Sweden

Denmar

k

Source: Eurostat

Around 70% of Europe’s 236 million car parc is concentrated in the five main markets

of France, Germany, Italy, Spain and the United Kingdom. Car ownership rates vary

widely across Europe. There are 470 cars per 1,000 population for Europe as a

European Overview


whole; Western Europe recording a figure of around 500, compared with 300 cars per

1,000 people in the new EU member states.

The UK has the youngest car parc of the EU’s major markets at 7.44 years compared

with Germany's 8.1, France's 8.2, and Italy with an average of age of 7.5 years.

Parc turn percentage

The dynamism of any car market is measured by the churn in the marketplace i.e. –

the number of vehicles changing hands each year relative to the total car parc – a

figure known as the ‘parc turn’. Countries, with a well-developed wholesale

infrastructure for used cars, and tax-friendly treatment of used car sales, normally

produce a much higher churn of vehicles. The parc turn percentage essentially

highlights how easy, or otherwise, it is for car owners to buy a new or used car.

Parc turn percentages, 2011

31.030.3

28.426.5 26.0

24.4

22.420.6

12.510.9

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

%

Nethe

rland

s

Sweden UK

Austri

a

Belgium

Fran

ce

German

y

Portug

alIta

lySpain

Source: ACEA/National Trade Bodies

With combined new and used car volumes of 8.6 million, the UK is the most dynamic

of the major European car markets recording a parc turn of 28.4% in 2011, some

distance ahead of France’s 24.4% and Germany's figure of 22.4%. This underlines

the UK’s well-developed used car industry infrastructure and strong wholesale

market.

Spain’s parc turn dropped one point to 10.9% in 2011 as it suffered a 174,000 fall in

new car sales, continuing to prop up the parc turn table – well short of the figures

achieved by the major markets in the UK, France and Germany.

The UK is the most dynamic of the major European car markets

European Overview


Italy also lags well behind other major European markets on the parc turn front, falling

from 13.2% in 2010 to 12.5% in 2011, as Italian new car volumes tumbled by a

further 10.9% and 213,000 units year on year.

Parc turn percentage major markets, 2002 - 2011

242525

2726

25 25 25 2524

2223

2423

22 22 22 22

20

22

121315 15

15 15

1516 14

15

111211

14

17

1516

1516

12

2829

33 3332

34

32

28

31

29

10

15

20

25

30

35

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

%


Source: ACEA/National Trade Bodies

Lower new and used car volumes over several years saw the UK’s parc turn

percentage drop from a high of 34% in 2003 to settle around the 28% – 29% mark,

as new car volumes fell and used car sales stalled. The German parc turn fell steadily

from 24% in 2001 to 20% in 2007, but rallied in 2009 thanks to high volumes of

scrappage scheme new car sales. However, the figure has fallen in line with lower

new car volumes in the past two years.

While the French car parc turn has remained relatively flat over the past nine years,

Italy’s figures have fallen markedly as its new car volumes plunged by three-quarters

of a million units between 2007 and 2011. A similar pattern exists in Spain, where

new car volumes have almost halved over the past five years from 1.61 million in

2007 to 810,000 in 2011.

Used:new volume ratios

On the used:new volume ratio front, the UK’s figure, which edged up to 3.4:1 in

2011, remains some way ahead of the other major EU markets. Higher used car

volumes, and a fall in post-scrappage new car sales, saw Germany’s figure climb

from 1.6:1 in 2009 to 2.2 in 2011. Italy’s and Spain’s used:new ratios also edged

upwards to 1.6 and 2.0 respectively, as new car volumes fell sharply and used car

sales remained relatively flat. Portugal's figure climbed as its new car sales tumbled

in 2011.

The UK remains some way ahead of the other major EU markets

European Overview


Used:new volume ratios, 2011

1.4

1.6

2.0

2.2

2.2

2.4

2.9

3.3

3.3

3.4

5.0

Belgium

Italy

Spain

Austria

Germany

France

Denmark

Netherlands

Sweden

UK

Portugal

Source: ACEA/ National Trade Bodies

Used car sales per 1,000 population

The EU major market pattern continues with used car sales per 1,000 population

indicator; the UK’s figure of 108 beating France’s 85 and Germany’s 79 by some

considerable distance. Italy (47) and Spain (34) have the lowest used car sales per

1,000 people in western Europe, underlining the huge potential for growth in these

used car markets.

Used car sales per 1,000 population, 2011

109

108

107

97

89

85

79

72

72

47

34

Netherlands

UK

Sweden

Austria

Denmark

France

Germany

Portugal

Belgium

Italy

Spain


European Overview


United Kingdom

UK new car sales dropped by

4.4% and some 90,000 units to

1.94 million in 2011 – around

half a million fewer than the

average for the five years

leading up to recession. UK

new car volumes are forecast

by the SMMT to remain around

the two million mark for 2012

and 2013.

The UK’s used car

performance indicators, of 108

used cars sold per 1,000

population, car parc turn of 28.4% and a used:new ratio of 3.4:1, surpass those of

the other four major European used car markets.

Germany

Germany's new car volumes recovered by 8.8% to 3.17 million units in 2011,

following a drop of some 900,000 to 2.92 million the previous year in the aftermath of

2009's multi-billion euro scrappage scheme.

Following three years’ decline,

Germany’s used car volumes

settled at 6.4 million units in

2010 and 2011.

The fall in Germany's new car

volumes, after the end of the

scrappage scheme, saw its car

parc turn drop back to 22.4%.

However, it’s used car sales

per 1,000 population edged up

from 73.5 to 79 as used car

volumes settled 400,000 units

higher in 2010 and 2011.

Italy

Italian new car sales dropped by a further 10.9% and 213,000 units to 1.75 million in

2011. On the other hand, Italy's used car volumes have been more healthy, settling at

2.8 million units for the past couple of year.

UK used car sales; 2007 – 2011

7.16.7

6.36.6 6.7

0

2.5

5

7.5

2007 2008 2009 2010 2011

Mill

ions


German used car sales; 2007 – 2011

6.3 6.1 6.06.4 6.4

0.0

2.5

5.0

7.5

2007 2008 2009 2010 2011

Mill

ions


Germany's used car volumes settled at 6.4 million units in 2010 and 2011

European Overview


Italy’s used car market

performance indicators are very

low, however – used car sales

per 1,000 people at 47, a

used:new ratio of 1.6:1, and a

car parc turn of only 12.5%,

remain well short of French,

German and the UK's much

higher figures.

France

French new car market

volumes fell by 2.1% to 2.2

million in 2011, compared with

2010's higher scrappage-

fuelled figures; holding on to

second place in the European

new car sales league.

French used car volumes grew

230,000 to 5.47 million units in

2010 remaining there in 2011 –

second only to the UK for

performance ratios within the

EU's major markets – used car

sales per 1,000 population

(85.0), car parc turn (24.4%)

and a used:new ratio of 2.5:1.

Spain

Spain's new car volumes fell

by 17.7% and 173,956 units

to 808,059 in 2011. However,

its used car market fared

somewhat better, slipping just

4.4% to 1.58 million units.

While Spain's used car sales

per 1,000 population dropped

from 35.9 to 34.3, its

used:new ratio rose to 2.0:1

from 1.7:1 – and its car parc

turn was one point lower at

11.9%.

Italian used car sales; 2007 – 2010

3.23.0 2.9 2.8 2.8

0.0

2.0

4.0

2007 2008 2009 2010 2011

Mill

ions


French used car sales; 2007 – 2011

5.65.4

5.25.5 5.5

0

2

4

6

2007 2008 2009 2010 2011

Mill

ions


Spanish used car sales; 2007 – 2011

1.7

1.51.4

1.71.6

0

0.5

1

1.5

2

2007 2008 2009 2010 2011

Mill

ions


European Overview


Additional sources include:

ACEA (Association des Constructeurs Européens d’Automobiles)

Office for National Statistics

Verband der Automobilindustrie e.v.

Statistisches Bundesamt Deutschland

Zentralverband des dt. KFZ-Gewerbes

Ministerie de l’Equipement, des Transports et du Logement

CCFA (Comité des Constructeurs Français d’Automobiles) France

Centraal Bureau voor de Statistiek, Nederland

FederAuto, Belgium

National Institute for Statistics, Belgium

Danish Automobile Federation

Danmarks Statistik

ANFIA - Studies & Statistics, Italy

INE, España

GANVAM, España

Marketing Systems Iberia

ACAP (Associacão do Comércio Automóvel de Portugal)

Statistik Austria



Professor Peter N C Cooke

While the United Kingdom is not a member of the Eurozone and is unlikely to be for at

least a decade, if ever, half its exports still go to Europe. Any Euro collapse would

therefore have a disastrous impact on an already fragile, debt-ridden, UK economy.

Indeed, many commentators have down rated expectations for economic growth as a

result of the current crisis of confidence in the Euro.

The Euro crisis has had more summits than the Alps. At the time of writing, no

sustainable resolution seems to be emerging beyond bold rhetoric and pleas from the

debtor states for a longer period to get their economies on a sustainable footing.

Chancellor Merkel, on the other hand, is getting more than a little tired of being asked

to write an open-ended cheque to support weaker economies.

Machinations in the Eurozone have an impact on UK businesses and personal

expectations – on new car and LCV volumes and ultimately used car sales.

The UK economy – a macroeconomic viewpoint

UK Gross Domestic Product fell by 0.7% in second quarter of 2012 compared with

the previous quarter – far greater than anticipated by even the most pessimistic

forecasters due, in part, to a contraction of 5.2% in construction industry output.

UK quarterly GDP; 2006 - 2012

1.3

0.8 1.0

-1.1

-2.1

-0.7 -0

.3

0.6 0.7

-0.5

0.2

-0.4

-0.3

0.6

0.4

-0.7

-0.4

0.5

0.30.

6

0.6

0.4 0.5 1.

1

-0.1

-2.1

-5.5

-3.6

-1.0

2.4

-0.8

0.90.8

3.43.1 3.0 3.02.7 2.9

4.7

4.0

2.8

1.1

-6.1

-2.1

1.0

2.11.5

0.8

1.6

-4.5

0.0

-7.0

-6.0

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

2006

Q1

2006

Q2

2006

Q3

2006

Q4

2007

Q1

2007

Q2

2007

Q3

2007

Q4

2008

Q1

2008

Q2

2008

Q3

2008

Q4

2009

Q1

2009

Q2

2009

Q3

2009

Q4

2010

Q1

2010

Q2

2010

Q3

2010

Q4

2011

Q1

2011

Q2

2011

Q3

2011

Q4

2012

Q1

2012

Q2

-7.0

-6.0

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

vs.Previous Quarter vs. Quarter previous year

%%

Source: ONS

Machinations in the Eurozone have an impact on new car and ultimately used car sales



The figures also show a steady fall in the GDP trend versus the same quarter in 2011

– essentially a further slowing down of economic output which is currently 4% lower

than the outset of the 2008/2009 recession. The orange line is indeed a roller coaster

which, we are regularly assured ‘is about to turn and start to recover’.

The following chart shows the two key inflation measures recognised by everyone

but, arguably, understood by few. The key issue is that prices have failed to drop

back to the Bank of England’s target level of 2% target year-on-year increase, albeit

both indicators are now coming down.

RPI and CPI; 2006 - 2012

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

Jan

2006

Jan

2007

Jan

2008

Jan

2009

Jan

2010

Jan

2011

Jan

2012

%

% c

hang

e ye

ar o

n ye

ar

RPI CPI

Source: ONS

More importantly for many, the Consumer Price Index (CPI) is now the figure used as

the base for determining adjustments to index-linked state benefits.

Not for the faint hearted

The UK economic situation might be summed up in a number of bullet points,

although perhaps not for the faint hearted. Consider the implications for both new

and used car businesses, suppliers and customers – as well as the wider economy.

The economy is in recession and informed opinion suggests this situation could

continue for a third quarter.

The Bank of England has confirmed quantitative easing will be continued, and

funds will be made available to banks to lend to industry as well as assurances

that, should there be significant problems with the Eurozone, banks will be able

to draw down whatever funds are necessary. The problem with such largesse is

the impact on pensions, long-term investment and inflation.



Family net incomes have dropped by something like £12 a week or 7.1% in the

past year. Consider the impact this might have on a private motorist buying a first

or replacement used car.

Unemployment remains high albeit, in recent months, it has shown signs of

coming down. The hardest hit are under 25s – a classic used car buying

segment. Part of the challenge is to make the younger group employable and

create jobs to replace manufacturing where earlier generations started their

working life.

At the time of writing, the level of new jobs being created in the private sector is

outrunning the loss of jobs in the public sector. That could, in turn, increase

demand for used cars and used LCVs for start-up situations.

There is still a high degree of confusion over employment law and policy versus a

family-friendly economy. Which should take priority? Is this a time for pragmatists

to rule?

The Coalition has indicated ‘growth with austerity’, but has not yet spelt out what

this actual means for businesses.

SMEs are still being starved of finance as banks seek to rebuild their balance

sheets and larger organisations hoard in excess of £750 billion in cash reserves.

A growing proportion of these funds are being invested abroad where the tax

regime may be more clement. In mid June, the Governor of the Bank of England

announced, belatedly, a loosening of low-cost funds to banks to lend to business

rather than hoard to rebuild their balance sheets.

Any continued strength of sterling versus the Euro could, towards the end of this

year, lead to the major car manufacturers, with underutilised manufacturing

capacity in Europe, storming the UK with low-cost special deals for new cars.

What might be the impact on the used car market?

The relative stability and strength of sterling over the Euro might be judged by the

policy of many international businesses transferring all their cash at the end of

the day into sterling in London – then moving it back the following day.

Do we have a Plan B?

Whether, at mid year, a ‘Plan B’ is emerging, or even exists, is a moot point. There

are signs across Europe that ‘austerity alone may not be the solution’, but the UK is

not in the Eurozone. The Bank of England and the Chancellor have announced further

attractive funding for banks ‘to lend to industry’. One concern is whether banks have

been too brutal in the past, and SMEs are concerned about asking for funds because

of the terms, conditions and rates they will be expected to accept. Would there be

implications for both new and used car sales?

SMEs are still being starved of finance

Whether a 'Plan B' is emerging, or even exists, is a moot point



Forecast new car volumes; 2012 - 2015

Before we examine new car sales forecasts, it is interesting to consider how the

shape of the United Kingdom car market has changed over the past decade.

Consider the following points – how many apply to your own new and used vehicle

business experience?

Historic mainstream manufacturers have lost significant market share – no single

brand now has anything like a consistent 20% share. In living memory, three

motor manufacturers used to dominate the market with 80% of new market

volumes between them which, of course, used to feed through to the used

vehicle market.

How will Chinese indigenous brands be accepted alongside western brands? Will

used vehicle prices be a bonus or an Achilles’ Heel until there is market

familiarity?

Customers are no longer satisfied with the ‘evolutionary model’ whereby a vehicle

would go through several facelifts before being replaced. ‘Radical new products’

are demanded with the associated costs and risks for the manufacturer. This, in

turn, can create used car problems.

There has been a steady and indeed growing demand for niche products

including luxury cars and premium brands as the new car market has become

more segmented.

It is against such pressures that any forecasts have to be made. Macroeconomic

professional forecasts are often such that one might as well wear a pointy hat and

carry a ginger tomcat as a forecasting aid.

The key is probably sensitivity to qualitative issues and the ability, in the United

Kingdom, to think away from the affluent south east market, which is surprisingly

stable. In future, regional splits and analyses will become ever more important.

The chart overleaf shows how registrations fell from a peak of 2.5 million in the mid

2000s to 1.94 million in 2011 – or to an underlying demand of 1.71 million in 2009 if

new car scrappage deals are discounted.

The hatched area, in 2009 and 2010, illustrates new cars sold under the auspices of

the scrappage scheme, where private buyers received a £2,000 subsidy when trading

in a 10 years-old plus car for a new one.

Arguably, many of these scrappage vehicles are ‘lost to the industry’ in that they will

be retained by their proud owners for several years – many of whom will ‘probably

never buy another new car’. The Korean and Czech motor industries did particularly

well out of the UK scrappage incentive. As such, the scrappage units could

contribute to the emerging shortfall of younger, higher-value used cars.

Historic mainstream manufacturers have lost significant market share



UK new car registrations; 2000 - 2015

0.28

0.11

2.34

2.22 2.20

1.94

1.921.71

2.13

2.40

2.57

2.442.46

2.56 2.58

2.10

1.97 1.99

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Mill

ions

of

cars

New car sales Scrappage deals New car sales forecast

2.031.99


There have been calls from at least one European industry leader to reintroduce some

form of scrappage or subsidy to boost new car sales in Europe. It is the writer’s

opinion that any such move would be counter-productive, and the nations, which

would benefit most, would be Korea, CEE states and other producers of the smallest,

lowest-priced cars.

For 2012, the Centre for Automotive Management Team forecasts volumes much in

line with 2011. It may be necessary to drop this projection slightly in the coming

months in the light of the most recent economic performance. Equally, if the

Eurozone-manufacturers decide to force feed new car sales later in the year, these

forecasts could be conservative.

Looking beyond 2012 and 2013, growth will probably be slow, much in line with

economic performance and new car sales are not likely to hit 2.2 million units until

2015 – or beyond.

The key factors influencing the economy might be as follows;

Speed of economic recovery in the United Kingdom and the problems within the

Eurozone

Tight financial situation – both domestic and SMEs – but with new sources of

funds becoming available. Equally, innovative higher-risk lenders are moving into

the market.

Apparent inability, as yet, of the government to stimulate the economy.

Underlying personal employment and political uncertainty with further growth in

unemployment. Coalition does little to repair this issue

Looking beyond 2012 and 2013, growth will probably be much in line with economic performance



Many other problems could be identified, but 2012 is not looking like a year full of

economic promise. ‘Muddling through and getting back to zero rate growth in the

foreseeable future’ would be acceptable to many in the Treasury.

Two factors might change this somewhat pessimistic new car sales forecast by

generating increased volumes:

Car manufacturers taking advantage of the favourable sterling; Euro exchange

rate and importing high volumes of new cars from the Eurozone to the United

Kingdom

Manufacturers and dealers self registering significant numbers of units towards

the end of the year.

Used Car Market

It has been often claimed that the role of the new car market is to create vehicles for

the used car market. The UK used car market is about three times the new car

market in volume terms, and around £6 billion greater in value.

There will be a shortage of younger used cars for nearly a decade; the car parc of

units under five years old is around 2.5 million units lower than that of pre-recession

times. This, in turn, will lead to a new way of looking at the used car market – we

anticipate successful used car operators will appoint a Used Car Supply Manager,

whose sole task will be to ensure a steady supply of used cars to match customers'

expectations.

Both the new and used car industries are so large that they are closely linked with the

rest of the UK economy. Any significant change elsewhere can impact quickly on the

automotive sector, particularly changes and hiccups in the financial services sector.

There will be a shortage of younger used cars for nearly a decade




Many a guru claims we are in the ‘age of communications’ and ‘we can enhance the

consumer experience through communication’ – generally without defining

‘communication’. This magic word, at its most basic, means not just talking at people

in whatever form, but listening, too, then responding properly to feedback.

Tyre-kicking has gone online

But just how good are used car dealers at 'communicating' in the proper sense of the

word? ‘Tyre-kicking has gone on line’ is one clear message about the car buying

process. Google research has shown 86% of car owners start their research on what

car they might buy using search engines, yet more than half of these don’t end up

buying their first choice of brand.

In the pre-digital era, car buyers used to make five or more dealer visits during the

buying process, their experience restricted largely to the showroom. Today,

consumers make only 1.3 visits on average, which means dealers must interact

effectively with customers via on-line channels – and make the most of that one

'golden' chance when they get face to face with the customer.

Social media presence

Experts suggest a social media presence on Facebook, Twitter and Linkedin are vital.

Some take this environment one step further and claim the fast-growing adoption of

Smartphone technology means it is important to have a mobile-friendly website,

optimised with localised search technology. More manufacturers and dealers are

investing in such technology. Online, one in five searches has local content and one

in three on a mobile. Car buyers are increasingly searching for dealership and car

information while on the move.

A fickle mistress

Technology is, however, a fickle mistress. One can have all the technology under the

sun, yet get absolutely nowhere. It is critical to get the basics right. Car buyers are

increasingly demanding and that can influence every demographic group. ‘Silver

Searchers’ can be a formidable adversary indeed. They have time and may have the

inclination to prepare their homework thoroughly, and woe betide the salesperson

who cannot handle their most searching questions in that potentially short, but critical

first meeting.

.

'Tyre kicking has gone on line' is one clear message about the car buying process



‘Doing the basics well’ is a message that does not always get listened to –

technology is no substitute for personalised service, for product knowledge and an

awareness of stock availability – all the more complicated for used cars. A

salesperson is at an immediate, embarrassing disadvantage if a potential buyer walks

on to the site knowing as much, if not more, about the product range and stock

availability than the person whose task it is to sell to them

More than ever, the opinions of potential buyers are being formed outside the

dealership, by friends and family, by other users of electronic devices and

communications. Advocates claim dealers need to have a structured online

engagement and monitoring system in place using a sophisticated CRM program.

Customer Contact – what is it really?

The concept of customer contact is probably as old as Adam and Eve getting

together, yet do used car dealers pay more than lip service to it? Dealers spend a

fortune on trying to win new customers – advertising, websites, a presence on

Facebook, contact through Twitter – but how much time and effort is spent on

keeping in contact with their existing customer base?

Experience and surveys suggest dealers' sales staff are all too often not particularly

good at keeping in touch with existing customers and trying to interest them, or their

friends and family, in buying another car – bearing in mind a quarter of families own

two or more cars. Just how often do salespeople personally follow up recent, and not

so recent, buyers of used cars?

According to

this year's

consumer

survey, nearly

half of used car

owners had not

heard anything

from the dealer

they bought

their used car

from – as the table shows this is, sadly, 'par for the course'.

The number of existing customers who said they had been approached to see if they

were interested in replacing or buying another car has slipped to less than one in 10

car buyers in this year's survey – while the possibility of selling a car to a 'friend or

family member' appears to be off most dealers' radar.

Quite simply, contact with the existing customers has declined in an increasingly

difficult and competitive market – when long-term experience suggests it's around

nine times easier to retain an existing customer than find a completely new one . . .

Customer contact; 2007 – 2012

2007 2008 2009 2010 2011 2012

No contact 45% 48% 44% 44% 44% 48%

Servicing car 34% 32% 35% 32% 35% 31%

Satisfied with car 31% 30% 27% 32% 27% 24%

Change car 12% 14% 15% 14% 15% 9%

Sell to friend/family 3% 4% 3% 3% 1% 3%

Source: BMRB

Just how often do salespeople personally follow up buyers of used cars?



Car owners' preferences

Social media is undoubtedly a growing force and very much the hot topic for industry

consultants and media specialists. But, how do prospects and consumers prefer to

be contacted? This year, the BCA consumer survey asked car owners how they

prefer the dealer who sold them their used car to keep in touch with them.

Keeping in touch – customers' preferences

28

13

1

1

1

2

4

6

9

14

15

18

Don't know

Other

Text message

Facebook

Twitter

Radio

Telephone call

TV

Press

Website information

Letter\mailing

Email %

Source: BMRB

While a number of issues arrive from the chart, the overriding message is that car

owners prefer a ‘passive approach’ and much prefer gathering information in their

own time when they are ready to do so.

The top five responses could all be classed as a form of ‘passive data

communication' and account for three out of five of overall responses. On the other

hand, telephone, Twitter, Facebook and Text Messaging, which might be broadly

classified as ‘intrusive communication’, jointly account for just 7% of responses.

The most interesting response is perhaps the ‘don’t knows’ accounting for 28% of

the total contacted, to which one might add the ‘other’ count of 13%. Have these

would-be buyers not thought about it or are rather indifferent to the means of

contact?

Given the hugely positive responses claimed by electronic media companies on how

highly successful their communications platforms are for clients, email and websites

appear to be the most successful by some distance. Perhaps the message is ‘give us

the information in an easily-digestible format, and we'll will pick it up and look at it

when we are ready’. Maybe there is much wisdom in the phrase ‘you can take a

horse to water but not make it drink’?

The top responses could all be classed a form of 'passive data communication'



While electronic media offers a cost-effective way to reach a wide audience, it is

important to ensure the message being put over is both relevant and meaningful for

the target audience.

What used car to consider buying?

A well-worn definition of 'marketing' is 'to identify, attract, satisfy and retain

customers at a profit'. Used car dealers can spend considerable sums of money and

effort trying to interest car buyers in what they have to offer (attract) – but are they

spending their time and money wisely? Are they 'pressing all the right buttons' that

influence car buyers when deciding what used car to consider buying?

Each year's BCA consumer survey asks car owners what factors have the biggest

influence on them in this regard.

Influences on type of used car considered

2

4

4

4

6

6

8

8

8

10

12

15

21

24

16

Social media

Car TV shows

Dealer advice

Specialist motor mags

Car TV ads

General car mags

Newspaper adverts

Cars on street

Consumer reports

Dealer websites

Used car physical sites

Test drive

Internet sites

Personal experience

Family & friends %

Source: BMRB

The top two factors, 'family and friends' and 'personal experience' account for 45%

responses – once more, two passive influences. Although, if one adds 'Internet sites',

which are essentially passive, the total rises to 61% of car owners' responses. Again,

a case of personal decision and timing.

The media –in the form of newspapers, magazines and TV activities appear to have

little influence on the type of used car motorists first look for – with 'social media' yet

to make inroads at this crucial stage of the car buying process.

'Social media' yet to make inroads



The strategic message coming from this list of car owners' preferences is the huge

importance placed on 'friends, family and personal experience', when deciding what

used car to look for. Does this merit some sort of rethink on dealers' high-tech and

sales activities?

Strategic implications

A number of strategic implications might be extracted from the foregoing comments.

Salespeople appear to more focused on winning new customers, losing sight of

the potential from existing customers and their friends, family and colleagues.

Contacts with existing customers can offer a wide range of service and value-

added opportunities as well as leads for car sales. The most obvious opportunity

is the 'family fleet'. Remember, every 17 year-old may one day be a respectable

buyer looking for a first or second used car.

Customers and prospects want to feel in control of their purchasing preferences

and decisions and may not be party to social media or other means of electronic

intrusion. Remember, older men and women buy used cars too and still have

significant purchasing power. According to the Institute of Fiscal Studies, more

than 40% of 'pensioners' are now in the top half of the income scale.

Car buyers look for meaningful information and professionalism – although

contact with them to build a relationship does not mean a weekly contact with

‘an offer they can’t afford to miss'. Database management will allow dealers to

follow a customer's acquisition cycle and gather service business as well. The

‘bus syndrome’, of ‘nothing for an hour and then three come together’, is all too

easily replicated with uncoordinated electronic media use.

One hears and reads much talk about ‘enhancing the customer experience’, but

equally important is 'silence' and not constantly bombarding individuals with

unsolicited, inappropriate offers.

Quite simply, think through the objective of customer communications – keeping

customers happy, building loyalty and retention, prospecting, pitching the right

product at the right time – and getting in touch discreetly to interest them in

discussing their plans on the car front.

Customers may not be party to social media or other means of electronic intrusion


LCVs – A Black Hole on the Horizon?


The UK's new and used LCV markets are much smaller than the new and used car

sectors. Nonetheless, LCVs have a critical role to play in the economy and, it might

be argued, used LCVs have a crucial role to play in the country's economic recovery.

The majority of new LCVs are bought in large numbers by a relatively small group of

large fleets – public utilities, government, local authorities, short-term rental and

logistics companies are amongst the major buyers. Their purchasing power allows

them to negotiate attractive prices, finance and tight delivery schedules.

When these big players change their vehicles they expect to achieve good disposal

values. Their sheer size and sophisticated disposal routes mean they can defleet

relatively quickly, with a minimal loss, if any, when their level of business means they

need to downsize their fleet. These sometimes younger, lower mileage used LCVs are

generally bought by small/medium enterprises (SMEs) at much lower prices than

equivalent new vehicles.

The used LCV market equilibrium has clearly been upset over the past four to five

years by the steep drop in new LCV sales since 2007, a reflection of the most severe

and lasting economic downturn on record.

New LCV sales plummet

The chart shows new LCV registrations between 2000 and 2011. Considering the

weak state of the economy, and the dearth of new car volumes, it is somewhat

surprising, and curious, that new LCV sales rose by 37,000 units in 2010 and the

same amount in 2011.

UK new LCV registrations; 2000 - 2011

239

254266

304

330323 327

338

289

186

223

260

100

150

200

250

300

350

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Tho

usan

ds

of un

its

Source: SMMT

The used LCV market equilibrium has been upset over the past for to five years

LCVS – A Black Hole on the Horizon?


Two such increases don’t represent a trend, however – with new LCV registrations

going into reverse, once more, in 2012. Sales volumes for the first six months of 2012

are down 10.1% on the previous year at 119,786 units – with the rolling year total

standing at 246,701. This is some 13,000 units less than 2011's total of 260,000,

and 90,000 fewer than 2007's all-time high of 338,000 units.

Replacing overage vehicles

Two consecutive year rises in sales, in 2010 and 2011, is somewhat difficult to justify,

beyond that it happened. The explanation for the growth is probably quite complex

and perhaps lies with rental and utility companies replacing over-age vehicles,

possibly using accumulated funds to source new LCV units at exceptional prices. In

addition, growth was from a very low base in 2009.

It would be reasonable to expect the incremental volumes of used LCVs from such

fleet updates to have had a detrimental effect on used LCV auction prices. However,

the following chart shows no such thing happened; indeed average used LCV prices

at auction have held up remarkably well over the past two years.

Average LCV auction prices; 2009 - 2012

£2,9

24 £3,1

17£3

,544

£3,4

73 £3,5

95£3

,468

£3,5

66 £3,7

45 £3,8

62£3

,858

£3,9

02£4

,008

£4,4

27 £4,5

85£4

,500 £4

,633

£4,4

66£4

,280

£4,1

12

£4,2

11£4

,146

£4,1

79£4

,030

£4,0

67 £4,2

22

£4,1

46

£4,1

80£3

,969

£4,2

18

£4,1

40

£4,1

30£4

,056

£4,4

09£4

,301

£4,3

03£4

,275 £4

,483

£4,2

72£4

,227

£4,2

71£4

,370

£4,1

71

£2,000

£2,500

£3,000

£3,500

£4,000

£4,500

£5,000

Jan-09




Mar May

Source: BCA

More importantly, the age of used LCVs coming to auction in June 2012 has risen by

over six months and they have an additional 7,000 miles on the clock than 12 months

earlier.

These apparent anomalies – older units, higher mileage and higher selling prices

suggests there are more complex, perhaps strategic issues at play – which may not

yet be critical, but could possibly impact on the rate of economic recovery later in the

recovery cycle.

The age of used LCVs coming to auction has risen by over six months



The used LCV supply gap?

Assuming demand for used LCVs in a ‘normal economic period’ would be in the

region 310,000 a year (the exact number is not critical), the crucial issue is the lack of

new LCV sales below the dotted line.

This represents a potential shortfall of some 375,000 first-time used LCVs being built

up between 2008 and 2013 (and counting until new volumes reach some 300,000

units) – the effects of which will hit hard in 2013/2014 as the desperately low new

LCV volumes from 2009 come up for replacement.

UK new LCV registrations; 2000 – 2013

239

254266

304

330323 327

338

289

186

223

260

236

250

100

150

200

250

300

350

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Tho

usan

ds

of

units

Supply Gap

Source: SMMT

Not yet critical

In a period of continuing recession or, at best, a flat economy, such a severe shortfall

in potential used LCV stock is not yet critical. Demands can and are being met by

fleets and businesses extending replacement cycles.

The problem comes when the economy starts to recover. Government has indicated

there will be pressure to boost new housing starts, to refurbish the country's

infrastructure, with the private sector driving recovery forward. However, SMEs and,

more importantly, start-ups may have difficulty sourcing younger used LCVs to

support their businesses.

This represents a potential shortfall of some 375,000 first-time used LCVs



In the building industry, alone, there are some 876,000 small businesses – one fifth of

UK enterprises. Similar scenarios exist for services being outsourced by local

authorities and for the SMEs that provide delivery services for the burgeoning online

shopping industry. In 2010, there was an increase of some 87,000 sole proprietor

businesses.

Emerging issues for the used LCV industry

The latent and looming black hole in used LCV supply might once have caused a

rubbing of hands at the thought of incremental profit opportunities for retailers. All

very well, if all of the competition is doing the same. However, the used LCV sector is

likely to remain a highly competitive sector, and plans need to be developed and

implemented ready for the recovery – which will come at some stage.

Used LCV dealers might consider the following points:

In terms of assured used LCV supply, will one source be sufficient or might it be

prudent to establish a number and have agreements with them?

Are there additional value-added services such as servicing, finance, warranties

and insurance that might be developed to generate incremental profit, if the

volume of used LCVs and margins are squeezed?

Given there will probably be significant changes to the used LCV supply chain,

contingency actions, repositioning or diversification may need to be considered.

Realign the business

The used LCV industry is volatile, supplies of good quality, younger used vehicles are

already limited, and there is a strong likelihood the market will be 'starved' of these

over next few years.

The used LCV market may also become more competitive and used LCV retailers

might well have to realign their business to meet the threat of the looming shortage of

traditional stock.


Dealers Need to Face the Challenge of Changes in Consumer Behaviour

Tim Peake, Group Strategy Director, Trader Media Group.

The biggest challenge facing used car dealers in today’s market is the changing

behaviour of consumers. Consumers know how to use online tools to search for cars

and are better informed than ever before, but are dealers as well informed?

Auto Trader research shows that consumers are browsing and researching online

much more than ever before. They are now searching for cars using not just PCs but

increasingly mobile devices, including tablets. The information available to consumers

is available to dealers. If a consumer can search for a car in a local area and discover

how much a vehicle is selling for so can a dealer, but how many actually do?

Engagement continues to grow

Source: Auto Trader

Most dealers don't seem prepared to do it

High street supermarkets do it, Amazon does it. The travel industry now does it. But

most car dealers don’t seem to want to do it. Using dynamic market intelligence to

support decisions is second nature for most successful retailers.

They all invest time and money making sure they know what consumers want, when

they want it and how much they are willing to pay for it. This is an essential and well

proven ingredient in any successful retail business.

Consumers are browsing online much more than ever before

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

Jan-10 Jan-11 Jan-12

Searches Ad views

Challenge of Changes in Consumer Behaviour


Research also shows that 50% of usage takes place out of the home, enabling car

buyers to access the web in different environments where they couldn’t before. The

busiest time of day on Auto Trader and most used car sites is in the evening between

7pm and 11pm. In addition 30% of consumers are now willing to transact online,

while 85% would be willing to pay a 10% deposit online – 5 years ago this would

have been zero. Trust in the Internet, and transacting on the Internet has improved

significantly.

The almost universal use of online search tools today means the buying process has

changed. In 2000, a car buyer would average seven visits to a dealer’s forecourt

during the research phase whereas in 2011 it was down to two visits.

The 'zero moment of truth'

The point of purchase has also changed. We used to simply rely on the classic

stimulus and then first and second 'moment of truth’ to sell anything, from fridges to

TVs to cars. The Internet has created an interloper between the stimulus and first

moment of truth – the 'zero moment of truth'. We all now have the capacity to

research and price the potential product before we venture into the dealership.

Dealers acknowledge that car buyers now turn up at the dealerships with greater

knowledge than ever before.

Essential dealers respond quickly

It’s a sobering thought that today 25 million people use their mobile device to go

online every month. Auto Trader Mobile sees 27 million searches per month, that’s

58,000 cars viewed per hour and over 7,000 calls made every day. On average 16%

actually search on the way to a dealer. With all this online activity it is essential a

dealer’s online presence stands out, is mobile optimised and that the dealer responds

quickly to enquiries.

Unique visits to Auto Trader by mobile

Source: Auto Trader

16% search on the way to a dealer

Challenge of Changes in Consumer Behaviour


However, even if a dealer has a strong online presence, and a frequently updated and

easy to navigate website, if the basics are ignored then all that investment will have

been wasted. Phone calls and emails are usually the final point of a car buyer’s

research – ignore these requests at your peril! Unfortunately many do. A recent

mystery shop of 1,300 dealers found that 50% had ignored requests for information

and had failed to respond within 24 hours.

Data – an opportunity not a threat

The automotive industry is awash with data, yet it is surprising how little of it is

practically used. It seems old habits die hard and data is seen by many as a threat to

tried and trusted instinct, experience and judgement. Dealers should use this instinct,

experience and judgement to complement the data and not to second guess it.

We do know that dealers who use market intelligence products to support their

decisions are more profitable. A recent survey of over 6,000 dealerships, with more

than 20 used cars in stock, found that 54% of their stock has low current regional

demand – and only 40% of their vehicles are priced to deliver strong Internet

response and good margin – the remainder are either priced too high or too low.

Intelligence is invaluable and readily available

Intelligence on market trends, pricing and local demand when buying, selling and

retailing stock, is invaluable and also readily available. Understanding which are the

most sought-after makes and models and what price should be paid for them will

help a dealer stock the right product and buy it at the right price.

Furthermore, having an effective pricing strategy once cars are on the forecourt to

maximise stock turn will have a significant effect on overall profitability – a key

objective of any successful used car retail operation. The average UK stock turn is 5-

6 times per year. However, there are used car operations achieving significantly

better who clearly benefit from the increased opportunities in F&I, servicing, repeat

business and return on capital invested.

Analysing the available market data and making intelligent use of this to influence

pricing and purchase decisions will not only provide a competitive advantage, it will

also set the benchmark for other dealers in the area.

The winners of the future

But the intelligent use of data isn’t just an occasional activity – it should underpin the

business on a daily basis. Those dealers that start to act like retailers in their attitude

towards data will be the winners of the future, evolving from traditional dealers to

become Internet car retailers. Those that don’t will continue to struggle as consumer

power increases fuelled by the on-going transparency created by the Internet.

Dealers should use instinct, experience and judgement


BCA – Europe’s Leading Vehicle Remarketing Company

BCA is Europe’s largest vehicle remarketing company with 19 UK remarketing

centres and a dedicated administrative hub and data centre, plus a further 26

Mainland European facilities. BCA employs over 2,100 well-trained and highly-

motivated staff delivering a wide range of services to buyers and sellers of used

vehicles.

BCA sells around 600,000 vehicles in the UK annually, with a further 200,000 sold in

Europe through a variety of physical and online channels. The company is on target

to sell 130,000 vehicles online in the UK during 2012, with around 100,000 online

sales taking place in Europe.

BCA – we’re easy to do business with

BCA is innovative and adaptive to changing market conditions. The company has

moved a long way in a short period, from being just an Auction Company selling in a

physical environment to a Multi-Channel Remarketing Company, selling vehicles

through a variety of physical and online channels and offering a range of

complementary services.

BCA has listened to its customers and is focusing on delivering services that meet

their needs, whether they are a buyer or seller. By constantly measuring customer

satisfaction and benchmarking service levels, BCA works with its customers to deliver

effective outcomes in a highly competitive marketplace.

BCA delivers a constant and significant investment in highly-skilled staff to develop

technology solutions appropriate for the marketplace we operate in. This brings

benefits to customers in terms of efficiencies and profitability, rather than just being

technology for technology’s sake.

BCA sets the pace for online sales

BCA has long been the leader in the provision of physical auction services and

continues to be so both in the UK and on mainland Europe. Now, the BCA online

offering is the most attractive available in terms of choice of platform, quality of stock,

quality of information, robustness of the technology and the ease of use. Our

customers tell us they want to buy and sell used vehicles online 24/7, 365 days a

year to gain a competitive edge – and that is exactly the opportunity BCA gives them.

BCA offers a choice of online routes to market - Live Online, Bid Now, Buy Now and

e-Auction – and vehicles can be Offsite or Onsite when they are offered for sale.

BCA’s Live Online dominates the sector with 106,000 vehicles sold in 2011.

BCA – Europe's Leading Vehicle Remarketing Company


Up to 1,700 Live Online sale sections are staged every month and 90% of BCA stock

is available through this route. Buyer support is massive with over 2,500 individual

trade customers purchasing every month in the UK.

BCA has the infrastructure and expertise to support the requirements of multiple

physical and online selling channels. Sales activity is supported with a sophisticated

logistics operation, accounting for around 850,000 collections and deliveries and

120,000 end-of-life inspections in the UK alone, while 732,000 vehicles are pre-sale

prepared using a range of specialist services.

BCA develops E-Sales key enablers

BCA has invested in a number of specialised products and services to support the

wider remarketing activity.

Autograde – launched in 2011 – standardised BCA’s gate appraisal system to

automatically generate a vehicle condition grade based on the defects identified.

BCA’s goal is that every car offered for sale whether online, in the auction hall, or via

any other sales channel including any vehicles located ‘offsite’ will be ‘condition

graded’ accurately, truthfully and objectively. Accurate condition and grading

statements are critical to building buyer confidence – particularly for remote bidders –

and BCA continues to work closely with trade associations NAMA, the RMI and the

BVRLA to agree industry standards.

BCA Assured – also launched in 2011 – provides peace of mind to buyers with a

report on a 30 point mechanical check carried out by an independent motoring

organisation. This includes an onsite drive to test brakes (to VOSA standards), as well

as checks on warning lights, tyre depths, engine noise, limited gearbox check,

suspension and fluid levels. The report appears in pre-sale cataloguing on the BCA

website and a printed copy is available with the vehicle when it is sold.

Appraise Value and Sell – this online tool launched in 2012 and comprises three

modular components that provide a range of benefits for used car sellers. The tool

generates consistent and objective appraisals, powered by BCA Autograde, accurate

real time valuations – BCA Marketprice – using the UK’s largest used vehicle

databank and Smart Sell – a seamlessly linked remarketing process. Sellers can use

just one, two or all three functions and as a web-based tool the product can be used

by any computer with an internet connection – from tablet to desktop.

Arbitration – BCA is setting the industry standard with resolution policies that reflect

the changing environment of the remarketing sector. The Live Online Dispute and

Arbitration Policy (LODRAP) and Mechanical Dispute and Arbitration Policy (MEDRAP)

are now fully enshrined within BCA’s Terms & Conditions.

BCA – Europe's Leading Vehicle Remarketing Company


Mobile Technology – customers are increasingly choosing to interact with the

remarketing sector via mobile devices and BCA is leading the way in developing

responsive web technology that identifies the device that is viewing the company’s

website and configures itself appropriately. This ‘app-free’ approach means any

customer can interact with BCA online through any mobile device and enjoy the

optimum result.

More customers deal with BCA

BCA talks and listens to customers to meet their needs.

Many major volume sellers use BCA for their remarketing programmes, often

exclusively, including vehicle manufacturers, leasing and contract hire operators, daily

rental companies, financial institutions, government bodies and utilities, dealers and

traders. BCA’s selling service is based on delivering the best residual value for

vehicles and fastest speed of cash to bank, with total security and peace of mind.

BCA does much more than sell used vehicles for its vendor customers. The company

offers a range of bespoke outsourced services that go much, much further. These

include:

Remarketing Managing Partner for volume sellers

Managing upstream Affinity Sales/Driver Sales

Running manufacturer Stock Market and Fleet Repatriation Services,

Delivering full service De-Fleet Management

Operating as a Pan-European Remarketing Partner delivering a structured sales

programme across multiple markets

Running Offsite Sales Programmes for a range of vendors

Handling all ‘end of life’ vehicle movements as a Logistics Partner.

The exclusive MyBCA loyalty programme delivers a range of benefits for professional

motor industry buyers, linked to the volume of vehicles they purchase from BCA. It

also offers customers access to business-critical information on the latest trends and

movements in the used vehicle market.

For all its customers, BCA offers end-to-end operational fulfilment, the highest quality

of service and value adding relationship management.


BCA Network


Statistical Data

This section of the Used Car Market Report includes data taken from the 2012 BMRB

International survey of 4,000 UK car owners, providing an insight into their views and

preferences in buying or owning a used car.

It supplies background information on the Consumer Experience and Regional

sections of the report, and allows readers to draw comparisons with their own views

and experience of the UK used car market.

NB All responses are percentages.

Statistical Data


Q How many cars are in your household?

Total Men Women 17-24 25-34 35-44 45-54 55-64 65+ AB C1 C2 D E

One 45 46 45 33 47 49 45 48 47 43 45 51 49 31

Two 22 25 20 16 18 31 31 28 12 34 25 21 9 4

Three or more 4 4 4 7 2 3 8 5 2 9 4 3 1 2

None 28 25 30 43 32 17 17 19 38 14 26 24 41 63

Scotland North Yorks & Humb

North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

One 39 53 49 45 45 42 43 49 50 46 41

Two 25 16 20 28 26 24 28 26 24 22 13

Three or more 10 1 4 2 4 2 7 8 3 6 2

None 26 30 27 26 25 32 21 17 22 26 44

Q Have you bought a new or used car recently?


Yes, new in 2007 or earlier 3 3 3 0 2 3 2 4 6 4 4 2 2 1

Yes, new in 2008 2 2 1 0 1 1 1 2 3 2 2 1 1 0

Yes, new in 2009 2 2 2 1 1 1 2 3 4 4 2 1 2 1

Yes, new in 2010 2 3 2 1 1 2 3 4 3 3 3 2 1 1

Yes, new in 2011 3 3 3 2 2 3 5 4 3 6 3 2 1 1

Yes, new in 2012 1 1 1 1 1 2 1 2 1 2 1 1 1 0

Yes, used in 2007 or earlier 7 8 6 3 7 7 9 9 7 7 6 9 6 4

Yes, used in 2008 3 4 2 0 5 4 5 4 2 4 4 4 2 1

Yes, used in 2009 5 5 4 4 6 6 6 5 3 6 5 5 4 2

Yes, used in 2010 6 5 6 4 7 9 7 5 3 7 6 6 5 3

Yes, used in 2011 9 10 9 6 12 14 10 11 5 12 9 10 6 5

Yes, used in 2012 3 4 3 3 6 4 3 3 1 2 4 4 3 2

No 54 50 58 76 50 46 48 47 59 42 51 54 66 79


North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

Yes, new in 2007 or earlier 3 7 4 2 3 5 5 1 3 2 2

Yes, new in 2008 1 1 2 1 1 0 1 3 1 2 1

Yes, new in 2009 4 3 2 2 1 2 3 4 2 2 1

Yes, new in 2010 3 3 3 4 1 1 2 4 1 2 1

Yes, new in 2011 7 5 3 1 2 2 3 3 4 2 2

Yes, new in 2012 1 - 1 2 0 2 1 1 2 1 2

Yes, used in 2007 or earlier 6 8 6 7 5 12 10 2 11 6 4

Yes, used in 2008 4 3 3 5 4 4 3 2 5 2 2

Yes, used in 2009 4 6 4 4 7 4 13 7 4 5 3

Yes, used in 2010 4 8 7 4 6 5 8 8 5 7 4

Yes, used in 2011 11 9 10 9 8 8 14 14 11 10 4

Yes, used in 2012 3 4 3 2 5 3 4 5 4 3 2

No 52 42 52 58 55 52 36 50 47 55 71

Statistical Data


Q What most strongly influences the type of used car you would consider buying?


Views of friends or family 24 20 28 27 29 22 24 22 16 23 23 24 26 22 Personal experience particular make/model

21 21 21 12 20 21 25 28 20 27 22 18 13 15

Independent car internet sites 16 19 13 17 22 21 12 18 5 16 17 17 14 13

Test drive 15 16 14 17 16 18 13 13 14 18 13 12 19 9

Used car showroom/sites 12 12 13 9 11 13 12 12 16 11 11 16 10 9

Franchised \ used car dealer websites

10 11 9 9 9 13 9 12 9 10 10 12 10 3

Newspaper advertisements 8 9 8 8 8 8 8 11 8 4 8 10 15 12

Cars you see on the street 8 8 8 8 10 5 11 7 6 4 8 9 12 13

Consumer reports programmes 8 6 9 2 6 11 11 8 6 13 7 5 4 1

General motoring magazines 6 7 4 6 5 8 6 5 3 5 8 5 5 4

Car TV adverts 6 6 5 13 5 5 4 4 3 5 8 6 4 3

Car TV shows 4 5 3 12 5 2 3 2 1 3 6 4 2 1

Specialist motoring magazines 4 5 3 5 2 3 5 6 3 6 3 3 3 3

Selling franchised/used car dealer advice

4 4 3 2 7 4 1 2 7 5 3 3 5 4

Social Media (i.e. Facebook, Twitter) 2 2 2 5 4 1 1 1 - 1 2 4 3 1

Other 7 8 7 5 4 6 10 8 10 10 7 6 7 5


North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

Views of friends or family 21 35 25 24 26 20 31 22 31 18 20 Personal experience particular make/model

17 36 29 17 19 27 55 15 22 18 10

Independent car internet sites 13 10 22 13 23 17 10 16 14 18 15

Test drive 17 6 17 12 17 16 33 7 16 15 15

Used car showroom/sites 11 14 14 16 15 9 8 11 13 10 13

Franchised \ used car dealer websites

13 8 15 9 6 9 6 6 13 12 8

Newspaper advertisements 11 2 8 6 4 9 19 6 19 5 7

Cars you see on the street 7 5 6 10 9 6 9 - 11 8 11

Consumer reports programmes 6 8 8 3 12 10 9 5 10 8 6

General motoring magazines 6 4 5 7 4 5 9 8 7 8 1

Car TV adverts 8 1 2 4 6 3 5 14 8 3 8

Car TV shows 6 - 3 3 4 2 2 12 7 3 5

Specialist motoring magazines 3 2 6 4 4 5 8 5 6 3 3

Selling franchised/used car dealer advice

5 - 4 3 2 2 4 1 3 6 6

Social Media (i.e. Facebook, Twitter) 3 - - 2 1 2 - 4 1 4 2

Other 11 5 8 8 9 4 7 6 6 8 5

Statistical Data


Q What were the crunch factors that affected your decision to buy your latest used car?


Price 41 41 40 56 44 41 40 36 30 30 46 42 48 50

Mileage (low) 31 32 29 36 28 32 33 28 29 31 28 35 29 18

Make/model of vehicle 30 29 31 34 34 26 27 31 31 33 29 29 30 18

Engine size 18 19 16 20 15 18 15 21 20 16 13 20 24 22 Body type (e.g. estate or hatchback)

17 19 14 8 11 19 16 23 22 17 16 16 19 13

Age of the vehicle 14 11 18 19 13 16 10 13 17 20 12 12 13 7

Fuel option 12 13 11 4 11 11 17 14 14 13 15 9 11 7

Insurance group 10 10 10 17 10 10 16 5 3 6 14 11 9 10

Specification 8 11 5 2 5 12 8 12 8 13 11 5 2 1

Safety 8 12 4 11 9 8 7 10 3 8 6 11 7 7

Colour 7 5 9 12 8 4 7 9 2 4 7 8 9 8


North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

Price 40 36 60 34 40 40 54 26 39 39 42 Mileage (low) 39 31 31 31 27 26 28 21 32 34 28 Make/model of vehicle 34 20 30 29 37 25 43 27 37 25 27 Engine size 19 16 18 13 16 20 22 21 15 19 20 Body type (e.g. estate or hatchback) 14 14 9 21 17 10 30 24 19 17 13

Age of the vehicle 18 7 20 19 6 11 11 20 15 15 8

Fuel option 22 19 9 16 9 3 20 2 14 10 14

Insurance group 10 6 17 9 12 18 3 11 13 7 4 Specification 11 4 10 13 4 8 3 7 4 9 15

Safety 7 8 8 9 14 6 - - 3 9 20 Colour 2 3 2 5 12 12 7 6 4 9 6

Q What influenced your decision to buy your used car from that particular dealer?


Got a good deal on the car 33 33 33 34 42 38 27 35 23 33 34 26 45 24 Right car at best possible price

29 28 30 46 19 19 29 39 34 38 24 26 25 5

Could trade in my old car 19 20 18 14 15 15 16 31 22 20 21 17 20 14

Local and convenient 19 21 16 20 20 11 23 25 16 18 13 23 22 36 Dealer reliable and trustworthy

14 15 12 32 13 6 16 15 14 12 11 18 15 19

Staff friendly, helpful and professional

12 12 13 18 11 13 11 9 16 11 14 10 15 14

Wide choice of vehicles 11 10 11 15 4 16 4 15 13 10 12 14 3 10

Have bought a used car from them before

10 7 13 15 4 14 9 11 9 9 11 8 16 6

Offered a warranty or vehicle had warranty

10 12 7 6 2 9 13 15 11 9 8 12 10 10

Recommended by friend 9 8 10 21 8 5 7 5 14 8 8 10 10 7 Easy negotiation, lack of sales pressure

7 8 7 18 6 5 9 12 2 10 9 4 4 -

Good aftersales service 7 7 7 8 7 7 3 12 7 9 8 5 6 -

Quick delivery of car wanted 4 5 2 - 2 6 2 6 4 4 4 6 2 6

Statistical Data


Q What influenced your decision to buy your used car from that particular dealer?


North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

Got a good deal on the car 36 27 27 23 42 45 42 52 42 26 - Right car at best possible price

27 32 26 21 14 48 30 41 14 44 18

Could trade in my old car 17 17 21 19 23 9 20 71 24 8 55

Local and convenient 19 21 28 23 24 20 18 20 27 4 18 Dealer reliable and trustworthy

13 5 16 15 19 8 25 13 13 11 15

Staff friendly, helpful and professional

17 26 13 7 17 6 16 18 8 9 -

Wide choice of vehicles 21 13 21 16 3 - 12 21 4 4 30 Have bought a used car from them before

9 11 30 6 13 4 8 13 5 7 -

Offered a warranty or vehicle had warranty

10 16 6 4 13 6 12 13 9 11 -

Recommended by friend 13 12 19 5 6 5 - - 9 10 - Easy negotiation, lack of sales pressure

3 5 12 11 7 - 12 10 7 8 -

Good aftersales service - 11 11 12 11 5 15 13 - 3 -

Quick delivery of car wanted 2 3 5 4 3 8 3 11 - 5 -

Q Has the dealer you bought your car from contacted you for the following reasons?

Total Men Women 17-24 25-34 35-44 45-54 55-64 65+ AB C1 C2 D E To find out if you were happy with your car

24 22 25 38 8 21 23 29 32 22 29 21 22 18

About servicing the car 31 32 29 12 24 25 32 40 39 42 27 23 20 31 To see if you were thinking about changing the car

9 7 10 - 5 14 4 11 11 7 16 7 2 -

To see if a friend or a family member was interested in buying a car

3 1 5 - 5 3 - 2 4 1 5 3 - -

Nothing/no contact 48 48 49 56 62 52 49 33 42 39 48 55 60 58

Other answers 1 1 2 - 2 - - 4 - 1 1 2 - -

Don't Know 3 2 3 - 2 - 6 5 2 1 3 5 4 3


North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

To find out if you were happy with your car

23% 29% 8% 26% 18% 29% 25% 18% 18% 33% 22%

About servicing the car 37% 43 24 28 20 48 46 35 12 35 -

To see if you were thinking about changing the car

4% 17 - 4 8 13 17 25 11 7 -

To see if a friend or a family member was interested in buying a car

5% 10 5 - - 6 - 11 - 2 -

Nothing/no contact 43% 30 67 49 57 30 43 41 63 44 60

Other answers - - - 3 3 - - - - - 18

Don't Know 7% 4 1 2 3 6 - - 3 2 -

Statistical Data


Q What type of car did you last purchase?


Off road/4 x 4 4 4 5 - 3 6 3 6 7 4 6 5 3 4

Saloon 22 22 22 16 20 25 18 25 30 20 21 19 32 29

Estate 7 9 5 3 5 6 8 14 8 5 6 12 4 9

Hatchback 47 43 52 70 54 36 53 40 39 49 48 44 46 42

M.P.V/People carrier 10 12 7 1 8 22 8 7 5 12 9 11 6 8

Sports car/coupe 4 5 3 4 6 5 3 5 1 6 4 5 2 2

Prestige e.g. Jaguar 1 1 - - - - 1 - 2 1 0 - 1 -

Micro/City Car 2 1 2 3 1 0 4 1 2 2 2 2 2 1

Other 2 1 3 1 3 1 1 2 4 1 3 2 1 5


North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

Off road/4 x 4 4 4 4 3 5 3 - 6 15 4 1 Saloon 21 20 25 17 25 13 30 34 23 20 29 Estate 7 5 6 8 4 5 17 5 7 9 6 Hatchback 43 43 50 58 52 56 38 36 49 45 32

M.P.V/People carrier 13 24 10 10 7 9 9 8 3 9 14 Sports car/coupe 4 - 4 1 4 4 - 6 - 8 10 Prestige e.g. Jaguar 3 - - 2 - - - - - - 1 Micro/City Car 4 - 2 1 - 5 - - - 3 -

Other 2 5 - - 1 5 3 3 3 1 3

Q What influenced you most in buying a used car with a diesel engine?


Environmental considerations 6 6 6 6 3 6 9 9 9 3 3 3 6

Maintain value better 18 18 18 15 24 18 21 15 12 24 15 18 15

More reliable engine 24 27 18 30 15 30 15 33 24 18 30 24 21 30

Better fuel consumption 58 61 52 9 64 67 49 67 55 61 64 61 46 12

Engine would last longer 9 9 6 6 12 9 12 6 6 9 6 9 6

Do a high annual mileage 9 12 3 15 3 12 9 6 12 9 3 12

Other 12 12 9 3 18 12 9 9 6 12 9 9 9 21

Don't Know 6 3 9 15 6 6 6 6 3 3 3 15 3 3


North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

Environmental considerations 6 6 6 12 6 6 21

Maintain value better 12 24 24 15 30 27 15 33

More reliable engine 24 55 27 15 43 49 24 6 15 18

Better fuel consumption 67 82 24 58 40 46 73 37 85 67 37

Engine would last longer 3 18 9 9 18 21 6 9

Do a high annual mileage 21 12 21 12 3 15

Other 18 15 15 12 33 15 3

Don't Know 6 6 15 33 9 3 15

Statistical Data


Q Which of these reasons influenced you to buy a used car rather than a new car?


Couldn't afford a new car 34 31 38 46 39 34 39 27 24 23 34 39 45 40

Used better value for money 21 24 19 15 22 25 24 28 15 30 22 21 13 7

Lower depreciation with used cars

14 16 12 5 12 16 18 23 11 18 16 14 9 5

Always buy used cars 11 12 9 4 10 12 13 15 11 10 11 11 14 6

Needed a car quickly 6 6 6 10 5 6 8 6 2 5 5 8 7 4

More choice when buying a used car

4 5 4 3 6 7 3 5 2 4 5 5 4 3

Don't Know 6 6 7 12 6 4 4 5 6 5 7 5 7 9


North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

Couldn't afford a new car 34 34 34 28 35 43 40 31 39 32 35

Used better value for money 25 29 20 12 23 25 24 38 22 20 14

Lower depreciation with used cars

13 28 14 15 15 14 21 17 15 13 7

Always buy used cars 8 14 17 12 11 10 19 10 11 9 6

Needed a car quickly 8 7 3 8 5 7 5 8 7 3 6

More choice when buying a used car

3 1 4 4 3 3 5 13 4 4 6

Don't Know 9 5 4 8 6 5 1 4 3 7 9

Q How likely is it you or a member of your family will buy a used car in the next year?


Certainly will 3 4 2 4 4 4 4 2 1 3 2 3 3 2

Quite likely 8 9 8 11 10 12 8 7 2 10 10 9 5 2

50:50 chance 9 12 6 8 14 8 12 8 5 10 8 12 8 4

Unlikely 26 27 25 24 24 30 35 25 20 35 28 24 20 13

Certainly not in the next 12 months

20 19 21 17 18 24 19 23 19 21 17 24 22 14

Won't be buying a car in the future

30 25 35 30 27 19 20 33 50 20 32 25 37 61

Don't Know 3 3 3 6 3 2 2 1 3 2 4 2 4 3


North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

Certainly will 2 1 2 1 6 2 1 7 4 4 0

Quite likely 5 8 9 6 10 9 12 9 7 10 7

50:50 chance 10 16 6 14 8 12 10 4 8 5 12

Unlikely 39 18 20 27 24 16 22 24 48 24 23

Certainly not in the next 12 months

23 18 21 21 21 19 28 27 12 20 19

Won't be buying a car in the future

20 38 40 28 26 39 27 25 19 34 34

Don't Know 1 1 1 3 6 3 - 4 2 4 5

Statistical Data


Q When you come to buy a car is it most likely to be:


Used car, petrol 40 38 42 45 42 42 41 33 38 34 46 42 40 39

Used car, diesel 27 29 25 21 32 33 25 34 16 27 23 32 32 21

Used car, hybrid 1 1 2 1 2 1 1 2 1 1 2 1 2 1

Nearly new (up to 9 months old) used car, petrol

3 4 2 1 4 3 4 3 4 5 3 3 1 0

Nearly new (up to 9 months old) used car, diesel

3 4 2 2 1 3 4 5 1 4 3 2 0 2

Nearly new, (up to 9 months old), used car, hybrid

0 -- 1 -- -- -- 1 1 0 1 -- 0 -- --

New car, petrol 7 7 7 7 2 4 7 11 11 10 7 3 5 8

New car, diesel 4 4 4 3 2 3 6 4 7 6 3 4 3 3

New car, hybrid 0 0 1 1 -- -- 1 1 0 1 0 -- 1 --

Don't Know 12 11 14 19 14 9 9 7 18 11 11 11 16 26


North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

Used car, petrol 34 40 30 44 38 50 34 35 42 45 42

Used car, diesel 29 41 24 27 31 28 36 25 32 26 14

Used car, hybrid 2 - 2 1 1 1 2 - 2 0 4

Nearly new (up to 9 months old) used car, petrol

5 4 5 - 3 2 9 7 1 3 4

Nearly new (up to 9 months old) used car, diesel

4 - 2 7 3 - 3 5 2 2 1

Nearly new, (up to 9 months old), used car, hybrid

-- -- -- -- -- -- 4 -- 1 -- --

New car, petrol 12 4 9 3 7 1 8 8 6 4 11

New car, diesel 4 - 11 5 2 2 2 3 1 6 4

New car, hybrid -- -- 1 1 1 -- -- -- -- 0 1

Don't Know 8 12 11 12 14 12 - 17 13 13 17

Q If you buy a car in the future, where do you think you will get it from?


Franchised dealer (part exchange)

25 25 25 23 19 29 23 29 29 34 25 20 17 19

Private sale 25 25 25 11 24 28 29 28 27 34 21 23 18 15

Franchised dealer (buy direct) 22 22 21 29 32 19 21 18 9 12 23 23 33 33

Independent used vehicle dealer (buy direct)

7 9 5 16 9 8 5 5 2 5 9 8 10 5

Family or friend 7 7 7 8 7 6 5 10 7 5 9 5 9 3

Internet trader 6 6 7 12 9 6 6 2 4 3 6 6 14 13

Independent used vehicle dealer (part exchange)

6 6 5 3 5 6 7 7 6 5 6 6 8 2

Car supermarket 5 6 4 5 3 7 7 2 3 5 6 3 6 1

Auction 4 5 2 3 7 4 2 4 2 2 4 4 8 3

Other 3 2 3 3 1 2 3 5 4 2 3 3 4 3

Don't Know 12 10 14 16 13 6 11 7 20 9 10 14 14 21

Statistical Data


Q If you buy a car in the future, where do you think you will get it from?


North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

Franchised dealer (part exchange)

27 18 29 32 26 20 14 14 20 34 21

Private sale 29 37 41 20 20 27 40 30 19 23 14

Franchised dealer (buy direct) 22 17 19 19 16 32 23 24 24 18 26

Independent used vehicle dealer (buy direct)

2 2 6 9 7 5 5 7 6 9 14

Family or friend 2 10 4 7 7 5 13 4 10 7 9

Internet trader 2 3 7 8 8 5 5 2 4 5 16

Independent used vehicle dealer (part exchange)

5 8 12 4 7 10 17 3 8 4 1

Car supermarket 3 2 5 3 7 8 5 8 2 3 11

Auction - - 4 3 5 6 5 2 3 5 6

Other 5 2 2 5 3 1 1 0 4 3 2

Don't Know 11 15 7 11 11 12 2 17 13 13 16

Q Overall, how satisfied are you with your used car?


Very satisfied 67 66 68 68 64 66 63 68 80 70 67 67 65 55

Quite satisfied 28 29 26 21 30 29 32 30 17 28 28 27 25 37 Neither satisfied nor dissatisfied

2 2 2 2 2 2 3 2 1 1 1 3 5 2

Quite dissatisfied 2 2 3 4 3 2 2 - 2 1 2 3 2 5

Very dissatisfied 1 1 1 5 1 2 - 0 - - 2 1 2 1


North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

Very satisfied 59 75 67 62 70 61 75 75 73 70 57

Quite satisfied 37 18 31 31 26 35 23 20 14 26 42 Neither satisfied nor dissatisfied

- - 2 1 1 4 - - 5 4 -

Quite dissatisfied 2 3 - 4 1 - 3 3 6 1 1

Very dissatisfied 2 4 - 2 1 - - 2 2 0 -

Q How expensive will the price of fuel have to be for you to change to a more full-efficient car?


£1.30 per litre 8 10 6 6 11 6 9 9 6 6 8 8 9 10

£1.35 per litre 3 4 2 2 3 6 1 3 2 4 3 2 3 3

£1.40 per litre 4 4 5 2 4 8 4 3 4 5 2 7 5 4

£1.45 per litre 3 3 4 4 4 4 1 4 3 2 5 1 4 6

£1.50 per litre 10 10 9 11 11 12 9 10 5 11 10 8 6 11

£1.55 per litre 3 3 2 3 2 3 1 4 3 2 2 4 3 1

£1.60 per litre 5 6 5 5 7 7 5 4 5 5 6 7 5 4

£1.65 per litre 1 1 1 2 1 0 2 - 1 2 0 0 1 1

£1.70 plus per litre 8 10 6 13 9 7 8 7 6 8 7 8 10 6

No effect 47 44 49 35 39 41 52 48 61 49 48 45 42 45

Don't Know 8 6 11 18 10 6 7 9 5 5 9 9 11 9

Statistical Data


Q How expensive will the price of fuel have to be for you to change to a more full-efficient car?


North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

£1.30 per litre 3 8 3 12 7 5 14 5 8 8 13

£1.35 per litre 2 1 - 1 3 - - 3 1 9 4

£1.40 per litre 7 9 2 5 4 8 - 12 5 1 3

£1.45 per litre 6 2 1 2 2 2 9 6 3 3 3

£1.50 per litre 10 10 12 6 8 9 13 6 6 12 12

£1.55 per litre 1 1 1 6 1 2 8 2 2 2 4

£1.60 per litre 9 4 8 3 8 3 2 3 10 5 3

£1.65 per litre 1 - - 1 - 1 1 - 2 1 3

£1.70 plus per litre 8 2 9 11 11 4 13 9 5 8 6

No effect 48 58 60 45 45 55 37 48 49 42 36

Don't Know 4 7 5 7 12 11 3 5 9 10 13

Q How expensive will the price of fuel have to be for you to change your pattern of driving?


£1.30 per litre 9 11 7 6 11 7 10 11 7 7 9 9 11 9

£1.35 per litre 4 4 3 1 5 5 2 6 4 4 4 3 5 7

£1.40 per litre 5 5 5 5 5 6 4 5 3 5 4 5 4 8

£1.45 per litre 3 3 4 4 4 5 1 5 3 3 3 4 4 7

£1.50 per litre 10 11 9 13 10 12 12 7 6 11 10 8 12 9

£1.55 per litre 2 2 3 2 3 2 1 3 3 2 3 2 2 1

£1.60 per litre 5 5 4 4 5 7 4 4 3 5 5 5 4 2

£1.65 per litre 1 0 1 1 1 - 1 - 0 1 - 0 - 1

£1.70 plus per litre 7 8 6 8 7 8 8 6 4 5 8 7 9 4

No effect 47 46 48 37 40 42 51 46 61 51 46 46 40 46

Don't Know 8 5 11 18 9 5 8 7 5 5 9 11 9 7


North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

£1.30 per litre 5 13 1 11 7 7 19 5 8 10 13

£1.35 per litre 4 2 1 2 5 0 - 2 1 9 5

£1.40 per litre 5 4 4 5 6 6 5 4 6 4 5

£1.45 per litre 4 2 1 5 2 4 10 6 2 3 3

£1.50 per litre 12 6 11 8 8 8 15 9 9 11 12

£1.55 per litre 3 1 1 5 1 2 2 6 1 3 1

£1.60 per litre 9 - 4 5 8 1 - 5 8 3 4

£1.65 per litre 1 - - 0 - - - - 2 - 3

£1.70 plus per litre 7 3 10 8 8 5 9 9 8 5 6

No effect 44 61 62 46 43 52 37 50 50 44 36

Don't Know 6 8 6 6 12 14 2 5 6 9 12

Statistical Data


Q If economic recovery remains slows, what might you look for when you change car?

Total Men Women 17-24 25-34 35-44 45-54 55-64 65+ AB C1 C2 D E Car with better fuel consumption

27 29 24 16 23 31 29 33 23 28 27 28 22 20

Car with lower road tax 20 18 21 14 28 20 18 23 15 20 20 21 18 15

Best possible purchase price 14 15 13 11 14 13 18 16 10 18 12 12 12 11

Smaller car 14 13 15 16 11 16 13 15 13 13 14 14 16 14

Car with lower CO2 13 14 12 11 11 14 18 14 9 15 14 12 11 11 Car with lower maintenance costs

12 10 13 10 12 9 12 17 9 13 12 10 11 9

Used car instead of new car 9 9 10 6 10 9 11 10 8 7 9 12 11 6

Same type of car 9 10 9 8 5 12 11 11 7 10 9 10 8 9

Best possible part--exchange price

8 7 9 1 8 11 10 10 4 11 8 5 7 6

Car with lower depreciation 5 6 4 2 7 6 6 3 4 5 5 5 3 4

Low interest finance 3 4 2 5 4 2 4 2 1 3 4 3 1 2

Lower specification\ performing car

3 3 2 4 3 2 3 2 1 3 2 3 2 2

New car instead of used car 2 1 3 3 2 1 2 1 4 3 2 2 2 1

Less prestigious car 2 2 1 2 5 2 1 1 1 2 1 2 1 1

Don't Know 27 29 24 16 23 31 29 33 23 28 27 28 22 20


North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

Car with better fuel consumption

22 30 28 22 37 29 41 20 36 23 18

Car with lower road tax 19 17 20 19 18 25 29 15 29 14 21

Best possible purchase price 12 13 15 11 22 12 21 5 15 16 9

Smaller car 19 9 16 14 9 21 20 16 15 11 11

Car with lower CO2 13 7 14 12 14 10 34 13 10 12 14 Car with lower maintenance costs

10 9 18 8 13 10 19 7 13 11 13

Used car instead of new car 8 12 8 7 11 13 12 7 12 10 5

Same type of car 8 9 12 7 4 9 10 4 13 12 7 Best possible part--exchange price

6 14 9 4 16 10 21 9 6 3 7

Car with lower depreciation 10 6 4 4 6 3 2 5 8 3 4

Low interest finance 4 5 1 3 3 1 - 4 4 2 4 Lower specification\ performing car

3 1 1 - 4 4 4 4 - 3 6

New car instead of used car 2 3 4 2 1 1 4 0 2 2 4

Less prestigious car 6 - 2 - 2 - - 1 1 2 3

Don't Know 22 40 15 16 18 11 10 37 16 24 26

Statistical Data


Q How do you prefer to be kept informed of new or used car sales offers, servicing and other opportunities by the dealer you bought your latest car from?


Email 18 17 18 19 23 24 17 17 6 23 16 17 11 12

Letter\mailing 15 15 15 10 15 10 18 16 16 16 14 13 15 13

Website information 14 17 11 16 23 16 13 14 5 14 13 16 13 10

Press 9 10 8 3 6 9 9 9 15 8 6 10 14 15

TV 6 6 6 13 6 4 4 6 5 5 6 6 8 5

Telephone call 4 4 5 8 3 2 5 4 6 6 2 5 6 5

Radio 2 2 2 3 3 1 1 2 1 2 1 3 2 2

Text message 1 2 1 4 1 2 1 1 1 1 1 2 2 1

Facebook 1 1 1 2 1 1 - 0 - - 1 1 1 2

Twitter 1 1 0 2 1 1 - - - - 0 1 1 -

Website 'live chat' 0 -- 0 -- 0 0 -- -- -- -- 1 -- -- --

Other 13 12 13 6 7 13 15 14 19 15 11 11 13 14

Don't know 28 26 31 32 28 24 25 28 35 20 36 27 32 32


North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

Email 17 12 14 14 21 19 19 20 17 19 20

Letter\mailing 12 20 20 18 14 9 24 5 13 14 16

Website information 14 8 15 14 17 12 9 6 13 16 20

Press 21 9 10 7 4 7 21 9 13 3 9

TV 5 1 7 7 5 4 2 11 5 7 6

Telephone call 5 4 5 2 7 4 5 11 5 2 6

Radio 2 - 4 3 - 1 - 7 2 1 -

Text message 1 1 4 2 1 3 - 1 2 - 3

Facebook 1 - 2 - - 0 3 1 - - 0

Twitter - - 2 - - 1 3 - - - 1

Website 'live chat' -- -- -- -- -- -- -- -- -- 1 --

Other 13 5 23 20 14 10 13 8 8 13 8

Don't know 16 52 20 27 23 35 15 39 34 33 19

Statistical Data


Q Which of the following measures are you prepared to take to reduce your personal motoring carbon footprint?


Walk more often 29 24 33 32 28 32 27 31 21 32 29 28 24 20 Cut out unnecessary journeys

21 21 21 16 21 22 21 26 18 25 20 20 18 16

Reduce annual mileage 16 18 14 10 16 16 19 16 17 16 14 17 21 11

Drive more slowly 16 19 13 14 13 17 14 20 15 15 16 17 17 12

Buy smaller car 15 15 16 13 14 17 17 19 11 15 19 12 18 11

Avoid short journeys 15 15 16 14 17 17 17 17 10 14 19 15 13 10 Buy a car with lower carbon dioxide emissions

15 14 17 10 16 16 16 19 13 20 17 11 12 7

Avoid heavy breaking 15 16 13 14 13 12 15 17 18 15 18 13 11 12 Check tyre pressures frequently

15 16 13 12 20 13 18 9 14 15 15 15 13 9

Accelerate less quickly 14 15 13 12 17 13 10 16 15 15 16 10 13 11

Use public transport 13 13 14 8 11 13 12 17 18 18 14 9 13 8

Switch of air conditioning 10 9 10 6 11 15 8 12 6 10 11 8 8 9

Car share 9 8 10 17 14 10 7 7 4 7 10 10 10 6

Cycle more often 9 11 6 10 7 11 11 7 5 8 11 8 8 2

Work from home 6 6 6 5 7 8 9 5 0 9 5 4 3 3

Take no action 16 17 14 12 14 13 17 12 24 16 11 19 16 28


North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

Walk more often 26 23 24 23 24 37 39 25 38 26 35

Cut out unnecessary journeys 27 27 23 21 19 23 33 12 25 18 13

Reduce annual mileage 21 19 16 16 18 11 16 13 20 13 15

Drive more slowly 20 17 13 15 15 13 29 12 18 15 13

Buy smaller car 23 20 16 17 13 17 23 11 15 9 18

Avoid short journeys 17 15 16 17 15 16 12 8 16 14 19 Buy a car with lower carbon dioxide emissions

18 19 20 13 11 15 18 21 14 15 10

Avoid heavy breaking 18 11 13 13 22 8 26 18 22 11 10 Check tyre pressures frequently

26 13 15 18 16 12 15 11 18 11 5

Accelerate less quickly 19 12 16 14 17 10 21 10 14 13 7

Use public transport 17 14 11 12 13 13 14 8 16 11 19

Switch of air conditioning 10 5 8 9 13 6 11 20 11 8 9

Car share 5 6 10 5 14 8 13 16 14 8 9

Cycle more often 12 4 2 9 6 13 6 7 10 9 13

Work from home 8 2 2 5 5 5 5 4 7 8 6 Take no action 8 9 3 6 11 11 1 16 7 17 9

Statistical Data


Q Have you taken any steps to substantially reduce your car running costs?


Use public transport 11 11 11 4 10 8 10 18 15 14 10 10 9 10

Lower cost insurance 9 8 10 5 10 13 10 10 6 9 10 8 12 5

Opted for shorter trips 7 7 6 7 7 6 7 7 8 6 7 6 10 7 Close windows when possible

5 5 5 4 8 5 6 4 6 7 4 6 2 4

Changed to car with lower insurance premium

4 4 5 1 5 7 3 3 5 4 5 4 4 2

DIY service\repairs 4 6 2 3 4 5 5 3 3 2 3 7 6 3

Reduced number of cars 3 3 3 2 4 2 2 3 3 3 2 4 2 2

Drive less often 2 2 1 1 1 3 2 2 1 2 2 1 - 2 Lower cost service provider

2 2 1 1 2 1 1 3 2 1 2 1 3 1

Walk\cycle (more) 1 1 1 - 1 2 1 2 - 1 1 1 2 2

Don't drive 1 0 1 1 0 0 1 1 - 0 0 1 2 1


North West

West Mids

East Mids

East Anglia

Wales South West

South East

London

Use public transport 12 9 11 9 11 12 18 8 8 9 20

Lower cost insurance 14 13 11 3 17 9 13 12 10 8 2

Opted for shorter trips 6 2 10 9 8 5 6 7 8 5 6

Close windows when possible 8 9 6 2 9 4 5 6 7 4 3 Changed to car with lower insurance premium

6 1 3 5 10 3 6 6 4 3 2

DIY service\repairs 4 3 4 2 10 7 2 3 5 1 4

Reduced number of cars 4 - 4 2 5 3 3 2 2 2 4

Drive less often 1 - 1 1 4 3 - 3 1 2 2

Lower cost service provider 2 - 1 2 2 - - 2 1 3 2

Walk\cycle (more) 1 - - 3 1 1 5 - - 1 1

Don't drive 2 - 2 0 - 1 - - 1 1 -


Research

The BCA Used Car Market Report is based on information from the Society of Motor

Manufacturers and Traders (SMMT) and many other trade and industry sources in the

UK and across Europe.

In addition, a consumer survey was carried out by BMRB International, based on

interviews with 4,000 respondents, representative of the UK adult population aged 17

years and over. Fieldwork for this research was undertaken in late March 2012.

The Used Car Market Report was written and produced for BCA Vehicle Remarketing

by Professor Peter N C Cooke and the automotive group at The Centre for

Automotive Management, University of Buckingham Business School, The University

of Buckingham, Buckingham, MK18 1EG

Copyright BCA 2012

Any part of this report may be reproduced for non-commercial purposes subject to

acknowledgement.

Any organisation wishing to use this report --- in part or in whole --- for commercial

gain, should firstly obtain permission from the Public Relations Department at BCA.

Telephone: +44 (0) 1252 878555. Fax: +44 (0) 1252 743447

Web site: http://www.bca-europe.com

E-mail: [email protected]

the used car market report 2012 - university of buckingham

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