Tough market for used cars

Experian, the global information services company, has released its latest used car sales statistics. They show a further drop in sales during 2007 and come with a warning for dealers that there may be little change in 2008 as consumer sentiment remains cautious.

Kirk Fletcher, Managing Director of Experian's automotive division says: "The popularity of older cars may be linked to the increasing difficulty consumers are facing when trying to get a bank loan and with older cars costing less; consumers can either pay for them outright or get a smaller loan."

As in previous years, the MPV, SUV and sports segments have continued to increase in sales, despite a fall in all other used car segments. Sales of used MPVs in particular started off strong at the beginning of 2007 (up 11.2%) and, while sales continued to increase, the rate of growth slowed during the following two quarters (5.4% and 3.3%) but rose again towards the end of the year (8.4%), to end the year 6.9% ahead.

Similarly, within the SUV segments, the biggest growth in sales during 2007 was in the older models. The Toyota Rav 4 model was the most popular selling used SUV model during 2007, with those aged between 5 and 6 years old seeing the biggest growth, followed closely by those over 10 years old.

Within the sports segment, the Toyota Celica was most popular selling model during 2007 and those aged between 6 and 7 years old saw the biggest growth.

Fletcher adds: "A slow housing market and the squeeze on spending has left consumer confidence low and this, in turn, hit the used car sector hard last year. The industry recorded the highest drop in sales (down 2.4%) since 2005, when used car sales first started falling.

"The new car market, in contrast, saw a revival of sales last year, indicating that there is still a willingness to spend on a car. However, the new car market is particularly competitive at the moment, with manufacturers launching new models and marketing them fiercely.

"Topped with discounts and promotions, used car dealers have to work harder to attract customers who are seeing the value of buying a new car over a used one."

He added that he hopes the "financial incentive" involved in this car insurance deal "will encourage more youngsters to drive responsibly and reduce their risk of being killed or seriously injured whilst driving".

As well as insurance, NFU Mutual also provides products such as investments, pensions and loans.

Resources: http://www.motorcarloans.com