The Auto Trader Owners’ Guide has revealed that motoring costs were cited as the main financial concern for Brits during the second quarter of this year. It was even more concerning than paying rent, job security and paying a mortgage – with 63% of drivers surveyed saying that they noticed the impact of the economy most when it came to keeping their cars on the road.
The new Auto Trader Owners’ Guide gives a deep analysis of the automotive marketplace and examination of motorists’ purchasing and selling behaviours over the last quarter. Additionally, Auto Trader asked 2,215 British drivers to gauge the impact of the economy on their vehicles purchases. About 55% of motorists say they had less disposable income over the period compared to the first quarter. With cheaper ownership costs being more important than ever, 53% of potential vehicle buyers say they are looking for a car that’s cheaper to run.
Despite fuel costs declining slightly in May and June, filling a vehicle’s fuel tank is still a big concern for 82% of the respondents, followed by insurance fees among 67% of the respondents. The want of more economical cars is driving demand for newer, fuel-efficient models – with 32% of new vehicle owners having chosen their car to save money on fuel, insurance or taxes; compared to 24% of used car owners. New fuel-efficient technology and motors generally offer more miles to the gallon. In June, new vehicle registrations increased for the fourth month in a row by 3.5%. This was driven by demand from private buyers, who purchased 9.8% more vehicles during the month.
Even though newer vehicles are more sought-after, a decline in new car registration from 2009-11 due to the recession means that there are fewer nearly-new vehicles entering the used vehicle market. As a result, the profile of the UK car parc is much older than before. During the second quarter, the price of used vehicles dropped 5% year-on-year to £8,620, which was the result of an increase the number of cars more than ten years old of age in the market.
However, with demand for new vehicles rising, the price of younger cars has increased. Cars under one year old have risen in price by 3%. But despite the higher price, buying a new car is a reasonable investment with the cost of running an older vehicle becoming financially restraining. With motoring costs at the front of everyone’s minds, more affordable and economical small vehicles have become more popular than previous models. Supermini vehicles and small family cars such as the Ford Fiesta and Volkswagen Golf are among those motorists most commonly purchased over the period.
Auto Trader strategy director Tim Peake says that, with the average cost of used cars on the decline, it’s easy to assume that now is a good time to purchase a used vehicle. However, this average price drop has been caused by an increase in older vehicles – ten years and older. Younger used cars are scarce. Because of this, now is a good time to buy a new vehicle. Motorists will benefit financially from a more economical motor, while the vehicle will have a better chance of holding its value in the future due to younger models being in high demand. British motorists love small vehicles – they are affordable, fuel-efficient and generally easier to maneuver and park. With manufacturers responding to consumer demand for smaller vehicles, there are many new models to choose from, he added.
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