UK used car sales record first growth in nine months

13 November 2019

UK used car sales record first growth in nine months

13 November 2019

The UK’s used car market continues to perform better than new car sales, with a modest rise in the third quarter of the year.

Sales of second-hand models increased by 0.9% year-on-year in the third quarter according to the latest figures released by the Society of Motor Manufacturers and Traders (SMMT). In total, 2,076,382 transactions took place between July and September, 18,925 more than in the same period in 2018.

Bucking the trend seen across Europe in the new car market, used diesel sales grew 1.4% in the quarter, with 858,442 models changing hands, while petrol sales suffered a slight drop, with demand shrinking by 0.2%. Plug-in electric and hybrid models showed a solid increase of 13%, totalling 37,589 units and increasing their share of sales to 1.8% from 1.6% in Q3.

‘This growth, following a prolonged period of decline, is encouraging and it’s great to see a growing appetite for plug-in and hybrid models as they start to filter down to the used market,’ says SMMT chief executive Mike Hawes. ‘However, ongoing economic uncertainty and growing confusion over local clean air zones make it difficult to predict the future. To make meaningful environmental gains, we need to get more of the latest, lowest emitting cars on to our roads replacing older ones quickly – and that means delivering the right conditions and policies to give new and used buyers confidence to invest in the vehicles that best suit their driving needs and budgets.’

The stronger Q3 performance was not quite enough to offset declines in the previous two quarters, with 51,785 fewer transactions in the first nine months of the year and the market down 0.8% compared to the first three quarters of 2018.

Diesel success

The increase in sales of used diesel models suggests there is still an appetite for the technology amongst used-car buyers. As a market-leading fuel-type for most of the last decade, and with de-fleeting pumping thousands of models into showrooms, buyers can take advantage of older models that do not come under new vehicle excise duty rules introduced in 2017.

However, as the UK’s new diesel market collapses, with a market share of just 25.7% year to date, it is likely that sales in the used car market will start to slow as newer models become rarer. The Vehicle Remarketing Association (VRA) said in January that in the two years since Dieselgate, which was followed by the impact of WLTP, half a million fewer diesel vehicles had entered the used car market.

Electric highway

While the SMMT figures do not break down figures amongst alternatively-fuelled vehicles, the increase of 13%, albeit on a relatively small base, is encouraging, showing demand can grow for second-hand low and zero-emission cars.

The inevitable change [in electric vehicle uptake] will begin when used-car buyers see electric cars as affordable alternatives to internal combustion power, says Glass’s car editor Jonathan Brown in his latest article. ‘Today, the optimal price for used-car consumers appears to be around £5,995 (€6,960), but for many, the affordability level is much lower.’

Segment reflection

Superminis remained the most popular segment, according to the used-car results, reflecting the trend in the new car market, with 684,929 changing hands, accounting for 33% of transactions. This market too could suffer the same fate as diesel, with manufacturers looking to reduce production or pull out of the sector completely as smaller cars become less efficient to develop.

The lower-medium and upper-medium segments were the next most popular, with 27.0% and 11.7% shares, respectively. Meanwhile, the dual purpose segment showed the largest percentage growth (15.2%) with 11.6% market share.

In other trends, black held its position as the number one colour among used car buyers, ahead of silver/aluminium and blue, with 57.1% of used cars sold in the third quarter clad in the top three colours. Orange overtook beige during the period to grab eighth place in the top 10, while bronze was the biggest grower, up 14.7%, albeit representing just 5,132 units of the 2.1 million cars sold in the quarter.