The UK motor trade industry has been rocked by the recent statistics from the Society of Motor Manufacturers and traders’ (SMMT), which showed that new car sales have fallen for a sixth consecutive month in September. September is typically a key month for new car sales with a change in license plate series, but figures are down 9.3% from September last year.
A Loss in Profits
This hit has been felt throughout the UK, but particularly in Scotland with car dealerships like Pendragon expecting to lose a staggering £15.14 million in profit compared to last year and are seeing the value of shares plummeting.
So, what is the reason for the lack of demand for new cars? The current economic and political climate in the UK is stopping consumers from making big purchases and consumer confidence is at an all-time low right now. The public has concerns over the economy, there is a great deal of uncertainty about Brexit and there is also confusion about the Government’s clean air plans. They have stated that they want to ban the sale of petrol and diesel cars by 2040, but many are claiming that this is simply not realistic.
Optimism for Used Car Sales
Whilst consumers are hesitant to purchase new cars, there is some optimism for the motor trade industry as there is a boom in used car sales. The public still need automobiles, so more and more are now playing it safe and making the smaller financial investment by buying used instead of brand new. Used car sales continue to perform, with dealerships such as Motorpoint storming at the front – the dealership chain recently stated that they are confident that they expect underlying pre-tax profits to be up by 64pc. This is, in part, to an increase in the sale of “nearly new” used vehicles, which are usually less than three years old. It is for this reason that Pendragon remain optimistic and they plan to double their used car revenue by 2021.
A Safe Purchase
For consumers looking at changing cars, they should certainly be looking at used or “nearly new” as this is the safest avenue with so much uncertainty in the air. Whether it is a young driver looking for their first automobile, a professional seeking an upgrade or a family looking for a better family vehicle, the used car market is gigantic and you should be able to find what you are looking for and at an affordable price.
Whilst it may be tempting to visit a private seller, keep in mind that this can be risky and open you up to used car scams. Additionally, you do not get the same level of consumer protection and there will be no finance options. Instead, visit a reputable dealership where you may also be able to part-exchange your current vehicle.
Whilst the latest statistics do not paint a positive picture for the motor trade industry, there has been a sharp increase in the sale of used automobiles. Consumers want to be smart with their money and avoid large financial decisions, with used cars being a great solution in the current climate.