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Car Finance: The Impact of 2nd Hand Car Value on the Automotive Market

Over the last six months there has been a lot of speculation about where the facts and figures suggest the new and used car markets are heading. We look at the latest statistics to find out what 2018 might have in store for car dealerships.


The New Car Market

In 2016, a record 2.7 million new cars were registered. It was the fifth year in succession that the market had grown, but it seems that this was when the new car market peaked, with 2017 new car registrations not matching up to those experienced last year.

In September, new registrations fell by 9% compared with the same period the year before (according to the Society for Motor Manufacturers and Traders (SMMT)), continuing the downward trend that has been visible for the past six months.

That said, car sales overall remain strong, by historical standards at least:

Source: BBC Business


The Used Car Market

Although the dip in new car sales might be disappointing for dealerships, there’s good news for those in used car sales. New leased cars sold over the last few years have now been handed back to the dealers – many in excellent condition and with few miles on the clock – meaning there has been an influx of quality cars to the used market.


Reflecting this, used car sales hit record levels in the first three months of the year and although they have fallen by 0.7% in the second quarter, they are expected to stabilise by the end of this year. So if supply has increased and demand is beginning to stabilise, what does that mean for used car pricing?


Statistics on the average value of the used car market are conflicting, with sources quoting both increases and decreases in average used car sale prices. The increase in supply will no doubt have an impact on price / value. Increases have been reported by some dealerships due to the influx of used cars in good condition, with low mileage and with some still under warranty meaning cars on the forecourt command a higher price tag. While other dealerships that already offer many quality used cars with low mileage (ex PCP) may notice prices slip as the additional supply of used vehicles are not supported by any significant increases in demand, meaning these additional vehicles simply give customers more choice.


So, how should dealers prepare?

2018 has been tipped to be ‘the year of the used car’ for dealerships – meaning dealerships should prepare marketing strategies to maximise both new sales in a tough marker and used sales in a saturated market.


Buyers have become (both for new and used cars) more likely to purchase a vehicle on finance:

This increasing trend means dealerships have access to a pipeline of customers that they know are ready (or nearly ready) to trade in their vehicle. It’s important for dealerships to use this information that they have at their fingertips to market to existing customers that are in the pipeline for a new car. However, more importantly, dealers need to make themselves known to customers of rival dealerships that are ready to return their financed cars.


A great way to do this is through personalised marketing campaigns, PPC marketing on certain search terms and Facebook targeting. For example, on Facebook, it is possible to target those that ‘like’ rival dealers, live within a certain radius of your dealership and that are ready to change their car within the next six months:


Personalised marketing campaigns such as the Facebook example above ensure your advertising budget is spent more wisely by capturing valuable leads with specific, relevant audience targeting.


At AlphaGraphics, we specialise in helping automotive businesses deliver personalised, data-driven, automated marketing campaigns that include direct mail to improve lead generation. To find out more about how we can help you boost both new and used car sales through smart, end-to-end marketing campaigns in 2018, visit:


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