Is The Rise Of The Used Car Market Down To The Madness Of New Car Pricing?
- October 17, 2019
- Posted by: Josh Locke
- Category: Automotive Industry
Quality used cars are hot property right now. With a range of stylish SUVs and reliable hatchbacks falling into the used car market for flexible and affordable prices, are new cars being exposed as nothing short of extortionate?
Hear me out. A new Ford Fiesta will set you back a minimum of £15,995, that’s without optional extras, metallic paint, or any fancy tech. Add all that in, and your average new Ford Fiesta will cost over £19,000. Let that sink in. Compare that figure to the average price of a used 2017 Fiesta that has likely had one previous owner and done under 30,000 miles and there is a staggering £10,000 disparity.
While finance options make buying new cars easier, most consumers are stumping up a big deposit and significant monthly payments only to return the car after three years for nothing in return unless they refinance the vehicle. With cars in the last decade becoming so much more reliable, safety-conscious and durable, is there any need to buy a new car? It’s a well-known fact that as soon as a customer drives their new car home for the first time, it’s instantly worth thousands less, but this isn’t the case with used cars.
Hatchbacks in general such as the Toyota Yaris, Ford Fiesta and Volkswagen Polo have some eye-watering price tags when bought new. But with consumer focus in the last few years switching to more spacious SUVs that are more family-friendly, one can find used cars such as the Vauxhall Mokka and Nissan Qashqai for half the price of newer and smaller cars. These great value cars are among the fastest sellers from forecourts.
Used car dealerships can continue to capitalise on the rising new car prices by offering warranty, service plans, and low rate finance options to their customers to nullify the few advantages new cars possess. Buying a new car with a 5-year warranty and something such as a service plan can remove any unexpected or bulky costs for motorist for a considerable time. The biggest worry from a used car buying perspective is after only 12-24 months, forking out thousands for new parts or getting slammed with a full-service cost for over £200 only months after owning the car. Selling cars with manufacturer warranties remaining and offering extended warranties can easy nervous minds and make buying a used car an even better prospect.
Majority In Agreement
More than four in five consumers think UK car prices are still too high despite the good bargains around, according to a survey from independent monitoring company CarPriceCheck.com. Most of the 3,500 car buyers who were surveyed felt manufacturers were being “greedy”, with only 2% recognising the disparity caused by varying tax rates across Europe. A further 14% considered dealers were keeping prices artificially high.
Steve Evans, chief executive of CarPriceCheck, said:
“The question of whether prices have or haven’t fallen may still confuse the consumer, but they’ve certainly embraced the concept of not buying from the first dealer they visit, and the notion of hunting down bigger savings.
“We’ve seen a culture shift since the heydays of the Rip-Off Britain campaign back in 1999.
“Today, the first words a dealer is likely to hear from a customer is ‘What kind of discount can I expect from you?’ – something that was alien to the majority of car buyers two to three years ago.”
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