More than two million used cars changed hands between July and September, according to the latest data published by the Society of Motor Manufacturers and Traders (SMMT).
The Q3 result was 2% down on the same period last year, which itself was 2% down on the Q3 result in 2016 (the best year on record), but the overall used car market remains strong.
It’s important to bear in mind that used car transactions consist of everything from a nearly-new dealer demonstrator vehicle to an old clunker bought privately that may not even be running. It also includes registrations being transferred with no money changing hands, such as within a family or similar.
Despite not providing a breakdown of vehicle information, the SMMT claims that sales of hybrids and electric cars were up by nearly 29%. However, this still only makes up less than 1.5% of total numbers. This compares with similar ‘green’ vehicles usually making up about 5-6% of new car registrations.
The SMMT does not provide comprehensive and useful data for the numbers of petrol, diesel and alternatively-fuelled (electric, hybrid, natural gas, etc) used cars, as it does for new cars, or maybe a breakdown of market segments (superminis, SUVs, etc), which makes it difficult for anyone to analyse the data properly.
Instead, the industry lobby group regales us all with the exciting news that black remains the most popular colour for used cars – although sales of used orange cars were up by 10%!
Unsurprisingly, given that it has been the most popular new car for the last decade, the Ford Fiesta is also the nation’s top-selling used car.
Sales down but borrowing growing rapidly
As we reported last week, used car finance is continuing to grow rapidly every month. Despite a 2% fall in used car sales, the number of used car finance deals was up nearly 10% on last year, according to numbers published by the Finance and Leasing Association. The total amount borrowed from dealer-sourced lenders by used car buyers was up by more than 17% to more than £4.5 billion.
That means that the average amount borrowed for a used car has gone up by more than 7%, reaching a new quarterly record of approximately £12,236.
With new car sales down by more than 10% for the quarter, it is highly likely that a lot of the growth in used car finance is coming from people moving from a new car on a PCP (personal contract purchase) into a nearly-new used car on a PCP to try and maintain their monthly payment levels.