Growth in the number and variety of finance packages available to private buyers will drive the new and used car markets in 2016, predicts Glass’s.
In the new car sector, which will see growth in registrations of around 3%, further finance packages will need to stimulate consumer interest and provide new avenues to affordability.
However, the real innovations are being seen in the used sector, where a range of PCP products will need to help bring more customers into a market that is starting to see signs of oversupply.
Rupert Pontin, Glass’s Head of Valuations, said, “Finance has become the core of the car market in recent years and we are seeing manufacturers, finance providers and dealers all looking to use it as a tool to continue to drive forward sales in 2016.
“So, in the new car market, we will see more and more competitive additions to the PCP schemes available, alongside higher level of support, to ensure that stock keeps selling. This is a continuation of a policy that has proven successful since the worst days of the recession.”
The used car sector was starting to take on an appearance similar to pre-crash levels, Rupert added, with a wider choice and higher volumes perpetuating a shift from a vendor to a seller market in the wholesale sector. This would be true for even the very youngest cars, thanks to high levels of pre-registration.
“While the trade will see values under higher levels of pressure, the winner will be the retail consumer who will have access to a wider selection of cars to choose from, coupled with finance packages designed to keep interest high in used stock at a time when new cars look such good value.”
Rupert said that the overall expectation at Glass’s was that, while the market as a whole was shifting slightly, there was little doubt that 2016 would be another profitable and comfortable year for the trade as a whole.
He added: “The key for manufacturers and dealers will be to embrace market insight and intelligence to ensure that anybody buying and selling new and used cars can see exactly what is happening at any given time, allowing them to make quick strategic adjustments to their annual plan.”