Used cars becoming more attractive than new as cost of living crisis bites
- 70% of consumers say that used cars have become more attractive purchases than new in the last month
- 53% are more likely to buy a used car than last month – largely because of rising new car prices
- Almost 9 out of 10 say their car use has been negatively affected by the cost of living crisis
Seven out of ten consumers (70%) say that used cars have become more appealing purchases than new in the last month, according to the very first monthly Startline Used Car Tracker.
New car prices having risen (47% of consumers) is the number one factor mentioned behind this developing trend, followed by not being able to afford a new car (25%) and used cars offering better value than new (24%).
The research commissioned by the motor finance specialist also shows a markedly increased propensity to purchase now among people already committed to buying a used car – more than half of those (53%) questioned plan to do so compared to last month.
Influencing factors over the used cars they are likely to choose are dominated by economic factors – with the top five answers being running costs (62%), cost of living (55%), inflation (28%), job security (25%) and the fact they are now covering fewer miles (25%).
The reasons chosen by respondents for changing their used car include their old car needing replacing (51%), just feeling like a change (41%), personal finances having improved (37%), buying a second or third car for fun (9%) and local clean air regulations (5%).
Petrol dominates likely consumer fuel choices (38%), followed by hybrid (27%), diesel (17%) and electric (16%). Those opting for a petrol or diesel car say that their reasons for doing so include electric vehicles being too expensive (47%) and trusting petrol and diesel technology (43%). Those choosing hybrids or electric say that electric power is the future (52%) and it is right for the environment (38%). Just 9% say that electric vehicles are now affordable.
When it comes to paying for their car, the top answer is using savings (30%), followed by hire purchase (28%), personal contract hire (21%), personal contract purchase (14%), bank loan (5%) and borrowing from a friend or relative (2%).
Finally, when asked how the cost of living would affect their motoring, just 12% of consumers said there would be no change. Impacts mentioned include reducing car use (37%), using their car as usual but making savings elsewhere (26%), delaying servicing or repairs (26%), delaying buying another car (25%) and using public transport as an alternative (15%).
Paul Burgess, CEO at Startline Motor Finance, said: “The results here show very clearly how the cost of living crisis is rapidly changing consumer perceptions of the cars they plan to buy, the reasons behind their choices, and their car use.
“Certainly, it looks as though there may be a shift away from new towards used, with an emphasis on more affordable and economical models. People are clearly worried about the direction of the economy and expect to change their motoring habits accordingly.
“It will be interesting to see in next month’s Tracker the extent to which this current mood has been caused by shocks such as the increase in National Insurance and the worry of the situation in Ukraine – and whether consumer sentiment will improve or worsen over time.”
The Startline Used Car Tracker is compiled for Startline by APD Global Research, well known in the motor industry for their business intelligence reporting and customer experience programs. This month, 301 consumers and 55 dealers were questioned.
Founded nine years ago, Startline is a flexible motor finance specialist and employs 170 people at its Glasgow headquarters. It works with around half of the UK’s top 50 franchise dealers by turnover as well as 70% of the top 50 independent car retailers, and currently accounts for more than 2% of the UK used car motor finance sector by volume.