Dramatic drop in car sales
Used-car sales have nosedived as the cost of living crisis bites, Turners Cars says.
But as consumer confidence to buy cars weakens, the cost of used vehicles is finally beginning to fall.
June private sales of used cars was 16.4% lower than in the equivalent month last year, and dealer sales were down 11.4%, Turners Cars chief executive Greg Hedgepeth said.
‘‘The market has definitely softened from January and February,’’ he said.
Rising household costs and record low consumer confidence were to blame.
‘‘There’s inflation, and fuel costs leaving people with less money in their pockets,’’ he said.
People coming off fixed home loans were facing large increases in the interest rates they paid.
Households were also having to cope with economic uncertainty, as economists predicted a recession.
‘‘People are unsure as to what the future holds,’’ Hedgepeth said.
Last year people were feeling wealthy, with low mortgage rates, and being unable to travel overseas. That encouraged some to upgrade their cars, he said.
Those aspirational buyers were not so prevalent this year, with buyers who needed to upgrade their cars predominating.
In June, there were just under 7000 fewer private used-car sales, and 2000 fewer used-car sales by dealers, Turners Cars’ figures showed.
Imports of used cars ‘‘had taken a nosedive’’, Hedgepeth said, partly as a result of clean-car standards introduced on April 1.
That could perversely result in a more rapid ageing of the national car fleet, he said.
The last two years have been tough for motor vehicle dealers. In June 2019 there were 3318 registered motor vehicle dealers. That had fallen to 3020, Turners Cars’ data showed.
New-car imports had been disrupted by China’s continuing Covid lockdown strategy, the Russian war in Ukraine and a semiconductor shortage, Hedgepeth said.
But while there were about 700 fewer new-car registrations in June than a year earlier, the total number of new-car registrations was only 1111 fewer in the first six months of the year than the 57,581 in the first six months of last year.
One bright spot in the new-car market was a sharp rise in rental car companies buying new vehicles in anticipation of a return of international tourists.
In May and June this year, 2552 new cars were registered as rentals, compared to just 1278 in the equivalent months last year.
But as buyers shied away from purchasing, prices for used cars were beginning to edge down.
Prices had been high, but they were softening in the used car market, Hedgepeth said.
‘‘Prices are easing from their highs at the end of last year.’’
Registrations of electric and hybrid vehicles were booming.
In May and June last year 1214 were registered. In the equivalent two months this year, the figure was 3951.