63% of drivers said running a car is their main financial concern in the current economic climate – above paying rent, a mortgage, or job security.
As part of the brand new “Auto Trader Owners’ Guide” we asked motorists’ about their buying and selling behaviour and how the economy has impacted on their car purchases.
Over half (55%) of the drivers we asked have less disposable income now than they did at the beginning of this year, so cheaper running costs are now more important than ever. 53% said they were looking for a vehicle that is cheaper to run despite the cost of fuel declining slightly during May and June of this year [i] – filling up the tank remains the primary concern for 82% of motorists, followed by insurance fees (67%).
The recession has also meant that people are holding on to their cars for longer and less new car registrations were made in 2009 – 2011. As a result the number of vehicles aged over ten years old in the used car market has risen and so the average price of a second hand vehicle has fallen by 5% to £8,620 – the lowest since Auto Trader began tracking used car prices in January 2010.
Demand for nearly new vehicles is still on the rise so the price of younger vehicles has increased – vehicles under one year old are now fetching 3% more quarter-on-quarter. The most popular vehicles to buy are more economical and affordable small cars. Amongst motorists that have purchased a car in the past three months, small family cars like the Volkswagen Golf and supermini models such as the Ford Fiesta are most commonly sought after.
32% of new car owners said they chose their car in order to save money on fuel, tax or insurance, compared with 24% of used car owners. With new motors and fuel-efficient technology generally offering more miles to the gallon, new car registrations rose for the fourth successive month by 3.5% in June 2012 – driven by demand from private buyers, who bought 9.8% more cars in June 2012 year-on-year [ii].
Tim Peake, Group Strategy Director at Auto Trader, explains: “With the average cost of used vehicles declining, it’s easy to make the assumption that now is a good time to buy a used car. However, this average drop in price has been caused by an abundance of older vehicles aged ten years plus in the market, and younger second-hand vehicles are scarce. Therefore, now is also a good time to invest in a new vehicle. Not only will you benefit financially from a more economical motor, but as younger models are in high demand, your car may have a greater chance of holding its value into the future.”
Download the full report for free here.