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Used Cars: Market Trends November 2016

in Editor's Choice, Market Reports, Surveys Wednesday, 21 December 20160

Photo of Ford Galaxy 620The new car market is looking strong. Registrations in November rose 2.9% to 184,101 units and year to date are ahead 2.5% to a record 2,514,764 units. The market was fueled by fleet which saw an increase of 5.1% for the month while registrations to private buyers fell 1.2%.

It would appear, so far at least, the political upheavals in 2016 with the Brexit decision in the UK and the surprise election of Donald Trump as president elect in the US have had little impact on market sentiment.

The used car market is also looking strong. According to Trevor Mather, Auto Trader's CEO, Brexit has not adversely affected the business and the number of cars on the online classified reached 500,000 in November.

“There has been no discernible impact. That's not to say there won't be one. The audience remains strong, the dealer numbers are strong and stock is strong. Furthermore used car transactions are at an all-time high,” he said.

Half a million cars is a lot of stock to choose from but some models sell faster than others. And the fastest of all is the Ford Galaxy, which on average sold in 19 days in November. The Ford Galaxy was also the nation's number one seller in October when it took an average of 11 days to sell. And it did the same in September when it stayed on forecourts for just 12 days.

The particular model was a 2012 version with the favoured diesel engine and an auto transmission. For November there were almost 1,400 Galaxy cars listed on Auto Trader but when you filter in fuel type, year and the automatic box, there were just 44 cars available. But why the Galaxy such a fast seller? There is no clear reason but certainly it has always been a popular car for those looking for a seven seater with Ford running costs and generous load lugging capacity.

Taking just one day longer to sell was the Kia Sportage, which sold in 20 days. This car appears frequently in the fastest selling ranks, and was the fastest selling car for two consecutive months in March and April 2016. Its attractions are immediate. Specifically, Kia is the only brand in the UK to offer a seven year warranty. More generally, like many Korean brands, it is producing higher quality and more sophisticated cars and styling and overall desirability has improved over the years.

Photo of Kia Sportage 2016 620The third fast-selling car was the Fiat 500L of which there were 549 listed on the website. But by the time you input the year and automatic transmission and fuel type, the choice had fallen to 45. And the fourth and fifth fastest selling cars were the Nissan Micra and the Peugeot 3008.

So far, so good. But where is market leader Ford in the listings? The Ford Fiesta is the UK's best-selling new car and the Ford Focus is no slouch on the sales front. In fact they do well. We need to go to the regional listings where a 2012 diesel automatic Ford Galaxy was the best seller in London and a 2013 diesel, manual Ford Focus was the fastest selling car in the north east. Ford also performed well in Northern Ireland where a 2015 petrol manual Ford Focus was the fastest selling car. In the south east a 2012 diesel automatic Ford Kuga was top of the charts. Ford also performed strongly in Wales where a 2012 petrol manual Ford Fiesta was quckest off the forecourt.

Karolina Edwards-Smajda, retailer and consumer products director with Auto Trader, argues that dealers can use regional data and digital tools to help source the stock that is right for them.

“The Ford Fiesta has performed very strongly in November's fastest selling cars and it's the UK's number one best-selling new and used car in 2016.

“Understanding which versions are in demand in your local area, however, means a retailer using their expert knowledge and data to ensure they are holding the right stock. In demand cars that are priced to the market sell quickly.

“Another benefit of an effectively run forecourt is it generates a higher stock turn in a year to make even more profit for the retailer. Dealerships using i-Control benefited from an average of 29 days to sell compared to a market average of 66 days in November and placed them at an advantage over their rivals.”

Important though it is, the speed of sale on the forecourt is just one indicator of demand, another is the number of searches carried out for on individual models. Analysis of search patterns on the Auto Trader website shows the most popular brands. Here German premium brands dominate with BMW, Audi and Mercedes-Benz taking the top three positions followed by Volkswagen. The UK volume sellers Ford and Vauxhall are in fifth and sixth places followed by premium contender Land Rover and then three Japanese brands, Toyota, Nissan and Honda.

Photo of BMW 7 Series 2015 620The website also breaks down search into individual models and here German-made product dominates BMW has three models in the top 10 with the 1, 3 and 5 Series while Ford and Mercedes-Benz have two each with the volume selling Fiesta and Focus and the C- and E-Class respectively . Also in the top 10 are the Volkswagen Golf, Audi A3 and Vauxhall Astra.

You can gain a valuable insight into what cars are most in demand by looking at the Auto Trader “ad views” for the month. Ad views are where potential buyers click on ads to get more information on cars. A perennial favourite in the UK was the Volkswagen Golf, which was the most viewed car followed by the premium Mercedes-Benz C Class, Ford Focus and BMW 5 and 1 Series models.

Looking at the figures for November we can see which were the fastest to sell off forecourts. Ford, performed strongly across the UK in the used market with the Focus, Fiesta, Galaxy and Kuga the fastest selling models in key regions. Generally, speed of sale is down to desirability, stock availability, location, specification and price. Looking at the most searched for cars, it's clear that the used car market is far more diversified than 20 years ago. All those premium cars sold on PCPs are entering the used car market in bigger numbers and there is big demand for them.