Used car market in good health as new registrations also rise

Used car market in good health as new registrations also rise

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Sales of new cars increased by more than 3% during May and used vehicle sales also strengthened as the industry recorded a second consecutive month of growth, official data from a leading trade body shows.

New car registrations soared to 192,649 last month, a year-on-year increase of 6,384, as the market was buoyed by the lack of a general election and growing demand for vehicles. However, the good news is tempered by the fact that the market a year ago was flat due to many motorists buying new cars before the arrival of higher vehicle excise duty.

There have been various reports pointing towards sustained growth in the second-hand car market in recent months and data shows that it continues to be in good health, which bodes well for the rest of the summer. Ex-fleet values are also retaining stability and there has been an uptick in the value of former fleet petrol cars during the last twelve months.

To make the most of the favourable economic conditions, fleet managers and other used car salesman should look to get the best motor trade insurance so they can concentrate on maximising profits rather than worrying about whether the vehicles they are responsible for are appropriately covered.

While new and used car sales are on the up, diesel continues its marked decline as volume plummeted by 23.6% amidst concerns about government policy and taxation that continue to take their toll. During 2018, diesel registrations have fallen by a considerable 30.6% and now have a market share of 32.8%.

The future is bright for the used car market but the picture isn’t quite as clear for new registrations as May was only the second month of growth after twelve months of decline. Consumer confidence appears to be recovering gradually, though households are still reluctant to make large financial commitments. director Alex Buttle also warned against taking the latest figures as a sign that the industry is back on track for good. He said: “The car industry will take any positive signs right now, however modest, and two months of growth at least offers a glimmer of hope. But let’s not kid ourselves – the industry is still facing a crisis, and it’s far too early to be talking about a recovery.”

Barclays corporate banking head of retail, Ian Gilmartin added: “Comparisons remain difficult due to the weak figures posted in 2017, and the record-breaking numbers recorded a couple of years ago are firmly in the past, but it does look like we’re edging back towards where monthly sales should be.”

“If the industry can continue to deliver modest growth in the next few months and close the gap on overall sales compared with last year, I think most sellers will be relatively content. Given the wider economic environment, double-digit growth in private sales is pretty remarkable even when 2017’s weakness is taken into account.”

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