Cazana’s 2019 Automotive Market Forecast

With 2018 consigned to the history books it is important to remember that the industry learnt some interesting lessons during the course of the year. With new car registrations down by 6.8%, almost exactly in line with Cazana’s predictions, and used car sales down by 2.1% it is no surprise that for some the full year results were not as expected and the trading conditions flexed in an unexpected and often difficult way as the months passed.

Key events seem to have crashed into the market one after the other and each one presented a fresh set of problems. From GDPR to WLTP and the often overwhelmingly misinformed debate on new diesel car emissions, there was always an opportunity for both discussion and a fresh approach at improving profit. Such rapid market changes highlighted the importance of quality insight and data provided from observations across the whole market taken from realtime sources and not historical data. Just three years ago many businesses were happy to accept that with a growing new car market and strong used car market, their own historical performance data was adequate on which to base commercial strategy which is by no means acceptable in today’s more complex market.

However, there did appear to be one intrinsically common link between almost every event that took place in the UK automotive sector. Many will have assumed the answer to be Brexit but whilst that played a significant part in many areas of the automotive sector during the course of 2018, the real common difficulty has come in the form of the government. Behind just about every key market changing event has been a controversial government decision or intervention that has been either unjustified or often inexplicable. Indeed, in some cases, just clarification of the decision-making process or of the guidelines issued would make the issues more manageable.

For 2019 the start point needs to look at the greater picture before reviewing key market influencing issues. The chart below shows the 2018 consumer confidence data and forecast for the first trimester of 2019.

Consumer Confidence Forecast

consumer confidence graph

The longer-term view from Trading Economics is that consumer confidence will return to -12 by the end of 2019 and -2 by the end of 2020 so a this means a long and slow recovery period. This is not a positive outlook for the coming months but it is a reality with which the automotive sector and more importantly the country must deal with. Economic growth in the UK has been downgraded too although it is fair to note that there is a similar picture in Europe, albeit less severe, and that is most certainly a reflection of the Brexit position.

Therefore, with low consumer confidence levels and poor UK economic growth seemingly the position during 2019, clarification must be given to a few points. The Brexit position has damaged the automotive sector and the damage is likely to get worse in the coming few months. Whether we leave with a deal or not there will be a period of balance and the country as a whole will need to understand what our new trading arrangements will be with Europe. This will mean that some products may become less readily available and changing tariffs will mean pricing will alter. This may significantly affect the automotive sector for some new cars.

There are signs that key European manufacturers are already trying to stockpile some vehicles in the UK to avoid higher prices. Controversially, the VW Group has been cited as being ready to increase new vehicle pricing (except for Audi) from the day after Brexit, thus passing costs to the consumer. This will be interesting as some of the large German manufacturers have a very large export market in the UK and changing tariffs may mean that altered pricing will see a greater uptake in the UK of home-produced models. This would mean a strange flex in supply and demand that may have long term industry affects particularly on the used market.

Whilst on the subject of new vehicle supply this is one area that is still being affected by the introduction of the new WLTP standard in 2018 and will evolve further during the course of 2019. Whilst many OEM’s tried to deal with this in 2018 there are still issues with some which is manifesting itself by lack of new car supply. For example, Audi sales remain particularly low in relation to direct competitors and the rest of the market with January figures of almost 27% below the same period in 2018 perpetuating the cause for concern given by a full year 2018 registration figure some 18% behind 2017. This is quite a strange position given that sales for the rest of the group had recovered.

Given the volume production constraints, economic concerns coupled with the Brexit debacle and the likely performance of the European new car market this year’s UK new car market is likely to produce registration volumes some 1.8% lower than in 2018 in Cazana’s opinion. SMMT believe the decline in registrations to be slightly higher at 2.3%.

With complications in the new car market it will be the used car market that will be the focus for many of the dealers in 2019. Consumers will seek to spend a little less money and this will be in part facilitated by better used car finance propositions. There are already a number of finance providers seeking to offer more innovative used car funding propositions. The interesting point here is that long-standing finance providers are seemingly moving a little slower and more cautiously than newcomers to the market. This is in part due to their business size but also the newer entrants to the market are using more and better data sources to help with more realistic RV setting resulting in more opportunities to do business driven by realistic deals based on better more accurate GFV’s. The use of retail-based data is key here to help understand what the future value of a car will be and data science is helping by providing fact-based insight untainted by subjectivity.

Greater activity in the used car market combined with a lower volume of stock coming from the wholesale environment as a result of lower registrations in recent years will bring some challenges too. The last two years have seen some real strength in used car pricing driven by retail consumer demand and the transparency that the internet has provided potential buyers has resulted in an acceleration of the change in which wholesale buyers not only search for but also price and source their used vehicles. Working from Retail price back is not a new thing but has become very much more prevalent in the last 12 months and getting the right data to support retail pricing and subsequent wholesale purchasing decisions is more important than ever.

The key is to look for retail driven data sources because that is what the customer does. Ensuring that the data provider researches the whole market and not just a subsection of it is critical. There are many ways to retail a car these days and dealers will continue to be more innovative in bringing the cost of retailing down and improving their profit margin. Having market-wide data that will facilitate profitable trading based on a comprehensive set of market-wide KPI’s will be more fruitful than just seeking the lowest retail price and racing for the bottom of the market. With used car supply constraints already evident this has already proven to be counter-productive.

The chart below shows what has happened to retail pricing as a percentage of cost new by fuel type over the course of the last two years: –

Cazana data graph

Data Powered by

This chart is interesting as it clearly shows that retail pricing has been driven by the consumer to reflect an increase in Hybrid vehicle retail pricing from 52% of original cost new in January 2017 to 65% over the course of 2 years. Most of that increase came during 2017 with just a 3-percentage point increase during 2018 suggesting that Hybrids many have found their pricing level. Also, of note is that the pricing and demand for Electric Vehicles are also rapidly increasing. An uplift of 21 percentage points in 2 years is extraordinary although the peaks and troughs in the data highlight the volatility of the pricing which has been largely due to the low data volumes and the type of models hitting the used market. Both petrol and diesel pricing lines show a great level of stability with diesel increasing by 2 percentage points and petrol by 3 percentage points over the period.

In the coming year as volumes of Hybrids returning to the used market increases, the level of retail pricing is likely to tail off slightly. This will be due to the realisation that hybrid ranges do not suit everyone’s needs coupled with the fact that there will be more cars in the market. Petrol prices will probably stabilise and diesel may see a mild drop although this is by no means a given. Whilst wholesale buyers are keen to try and talk diesel wholesale values down the facts are clear. Retail pricing is firm for now. Electric Vehicle pricing is beginning to come of age and this will consolidate during the course of 2019. This will reflect the improvement in not only range but customer understanding as they realise that these cars have a valuable part to play in our future and range anxiety need no longer be a consideration. Infrastructure improvements and clearer messaging from the manufacturer will also help.

The speed with which hybrid technology is improving is impressive although some OEM’s have rushed to get short-range offerings to the new car buyer that will have little appeal when they hit the used market. Clarity from the government on taxation and infrastructure support will greatly help adoption and the new sales figures whilst also consolidating the demand for used variants. There is still a long way to go to meet the somewhat adventurous new vehicle sales targets, but this will be aided during the course of 2019 by the further adoption of low emission zones in cities nationwide. Disappointingly some of the major cities have taken a bit of a step backwards away from somewhat controversial emission charge ideas but this has been partly driven by the greater understanding of the effect these charges would have on local constituents and their voting patterns.

2019 will also see the further development of mobility packages for consumers. The idea that a customer will buy a package charged on a monthly basis giving access to various different types of transport is perhaps a little further away than we might have been led to believe at the beginning of last year. There are a number of companies that have been working on this type of solution but as yet monthly rates have been a little prohibitive and the concept, whilst laudable has yet to gain mainstream adoption by the consumer. Autonomous vehicles also fell afoul of some of this type of over enthusiasm last year and whilst self-driving cars are making progress and will continue to do so during 2019, availability and acceptance is coming far more slowly than anticipated.

Two final points to highlight are firstly, that the diesel discussion will rumble on during 2019. With plenty of used car demand, the new car buyers will eventually realise that Euro 6 engines are not as bad as the national press may have them think. Equally for higher mileage drivers diesel is still a very cost effective and responsible way to travel and until Electric Vehicles have a consistent 350-mile useable range they will not make a dynamic impact on the market.

Secondly, 2019 will have a focus on the sale of multi-driver vehicles. There is growing concern over how the ASA and the courts are handling complaints raised by consumers who believe they were mis-sold their used car. The fact that many consumers seem to believe that a multi-driver vehicle owned by a company is worth less than a privately-owned car is part of the issue. However, condition and history of a car are far more likely to be the price influencer and the way in which a multi-driver car is looked after is arguably more comprehensive and detailed than that of a single driver privately owned vehicle. Unfortunately, the UK “compensation” culture is also a strong driver behind the legal action that may or may not take place.

In summary, the year ahead looks busy to say the least. Once Brexit is either delivered or a plan agreed the economy and consumer confidence will settle. New car registrations will decline by a further 1.8% over the 2018 figure and the focus will shift to the used car market. Innovative used car finance packages will help customers buy the car of their dreams based on accurate transparent dealer pricing and finance companies working with innovative retail driven forecast data will make good business decisions that will not only help the consumer but also their own business by facilitating more business.

Cazana is ideally placed to help every sector of the UK Automotive industry to improve business by providing high-quality realtime retail driven insight that will help improve the return on investment, increase awareness and improve profits. 2019 will be an exciting and innovative year for all.


Cazana’s Rustmap – rusty cars and where to find them

Over the last 6 months, there has been an array of bad weather conditions including one hurricane (Ophelia) and 21 storms in the UK including the more notable ones such as Storm Brian, Storm Georgina and Storm Aileen. All of this rainfall and harsh weather takes an unfortunate toll on our vehicles.

With this in mind, we have searched the extensive Cazana database and highlighted the counties in the UK that have the highest proportion of rusty cars, and identified which are the most rust prone. This was identified by looking at the volume of cars that have rust and corrosion warnings noted on MOT data.

It will come as no surprise that 5 of the rustiest counties for car owners in the UK are situated in Scotland where the weather conditions can often be harsher.

Top 10 rustiest counties in the UK for car owners

Here you have it, the worst offending counties for rusty cars.

Another unsurprising fact is that the top 3 counties with the highest proportion of rusty cars are close to the sea. While living close to the ocean may look stunning and have so many wonderful perks, unfortunately, it can be a tougher environment for cars. Certain environmental factors such as salt and fog near the coast can cause rust on a vehicle and accelerate vehicle corrosion.

  1. West Dunbartonshire, Scotland
  2. Fife, Scotland
  3. Northumberland, North East England
  4. Roxburghshire, Scotland
  5. Banffshire, Scotland
  6. Midlothian, Scotland
  7. Herefordshire, West Midlands
  8. Durham, Central England
  9. Lincolnshire, Central England
  10. Yorkshire, Northern England

Other counties that are high on the list include Lanarkshire, West Lothian, Angus and Flintshire. There is a clear pattern of either being close to the sea and somewhere where the weather conditions are tougher.

The counties with the lowest proportion of rusty cars

So in contrast to the list above, the counties with the lowest volume of rusty cars are mostly in the south and Wales.

  1. Antrim, Northern Ireland
  2. Middlesex, South East England
  3. Hampshire, South England
  4. Oxfordshire, South East England
  5. Surrey, South East England
  6. Denbighshire, North East Wales
  7. Kent, South East England
  8. Caernarfonshire, Wales

The top 10 rustiest cars in the UK

It’s surprising to see the nations favourite Ford Fiesta on here and not only that but it is top of the list. With so many on our roads and often older it is possible that they are also less well cared for. Land Rover and Jeep, however, are not as surprising to see on this list as they are often used heavily in off-road conditions where water and dirt are commonplace.

  1. Ford Fiesta
  2. Vauxhall Corsa
  3. Land Rover Range Rover Sport
  4. Ford StreetKa
  5. Toyota Rav-4
  6. Jeep Wrangler
  7. Volkswagen Polo Hatch
  8. MINI Hatchback
  9.  Ford Ka
  10. Fiat Grande Punto

What are the main causes of rust in vehicles?

rusty car in the sea

Rust is the reddish-brown/yellow colour that coats iron or steel when exposed to air and moisture. Our vehicles can be a big investment and financial commitment and to ensure we protect them we need to first understand what the main causes of rust are.

  • Location  

As fun as living near the coast is, as we mentioned above, it can take a toll on your car. Both the salt and moisture (water) in the air can cause vehicles to rust. Therefore it is no surprise that 6 out of the top 10 rustiest counties in this list are close to the sea.

  • Salt

Most road users in colder places will use salt to get rid of ice and snow from their vehicles and it is also used extensively to keep the roads clear. However, lengthy exposure to salt can be harmful to vehicles and make them more susceptible to corrosion as it gets caught in the nooks and crannies of the car.

  • Weather conditions

As we already mentioned water and moisture is a big cause of rust on and in cars. Rain, snow and fog are big factors in why our cars rust and corrode over time.

  • Neglect

Like anything in life if we ignore a bad situation it will eventually get worse. Not checking your car regularly and not keeping up with maintenance and more important cleanliness will cause minor instances of rust to flourish and turn into more serious issues.

Top 6 ways to prevent rust in vehicles

prevent rust in vehicles

  1. Regular maintenance. This may sound obvious but keep up with regular repairs as it can make all the difference when something is caught early.
  2. Inspect your car regularly and act on what you find covering body scratches and dings as quickly as possible
  3. Wash your car regularly. Make sure wheel arches and the underbody are regularly cleaned.
  4. Keep your car in a sheltered area. If you are lucky enough to have a garage or sheltered area to park make sure you use it to help protect your car from harsh weather conditions. If you don’t have a sheltered place to park then consider getting a car cover.
  5. Wax. Get your vehicle waxed twice a year (especially if you live near the seaside) and consider having a body protection treatment added.  
  6. Keep the inside of your car clean too. Don’t just wash the outside of the car, keep the interiors clean as well especially during Winter when there is more salt on the roads.

Cazana’s Used Car Market Update for August 2019

Car sales activity in August tends to be quieter than almost every other month in the year. Not only is consumer activity dependent on the weather, but it is also prime holiday time with children off school and leisure pursuits tend to be more popular than car dealerships. This year August has been more of a challenge than normal and it is fair to say that consumer demand has been lower than expected, although having said that, the retail pricing data implies that whilst values dropped further as the month passed, there has been some more consistency in the pricing decline than has been evident in the last few months.

From a new car market perspective, registrations fell by 1.6% over the same period last year which is lighter than some pundits had forecasted. It is worth noting that there is still evidence of significant pre-registration, and in this instance, it is not just driven by the requirement for market share but also due to the need to register WLTP cars in the face of the arrival of RDE2 legislation.

If the new car market has been challenging, then the used car market can be judged to have been harder for the majority. The question is, what have been the real drivers behind market apathy, and it is retail driven data that provides invaluable insight to the industry to be able to identify key considerations and the direct impact on dealer sales.

The current political and economic situation has moved from bad to worse in recent weeks and this is a significant factor in the consumer purchase consideration process. The chart below shows consumer confidence over the past 12 months:-

Consumer Confidence Index

Data Courtesy of Trading Economics

It is clear from this chart that the UK consumer is feeling very uncomfortable at this particular point in time. This has not necessarily impacted on the desire to buy a car, but it has affected the willingness to commit and therefore the time it takes to sell a car has increased.

With political events moving so quickly and controversially it is impossible to be completely relevant in describing the economic position as this is press release is published. Suffice to say, a “no deal” Brexit is now legally impossible and this, unfortunately, puts the country and the consumer back to a position of not understanding what the eventual outcome will be. If the process decrees that the UK must ask the EU for another delay then it is quite conceivable that business confidence, the economy and consumer confidence will be further damaged. If this is the case then we are likely to find greater pressure on pricing and more significantly the time it takes to sell each car.

As clarification of the current used car market performance, the following chart shows the comparison at key age and mileage profiles against the same period over the last three years:-

retail market performance

Data powered by

This chart shows a realistic picture of what should be happening in a normal to stressed used car market. The data shows that whatever the age and mileage profile, retail pricing is now falling away. Of note is the fact that the later plate cars seem to be holding value slightly better and have dipped in pricing terms by a single percentage point of original cost new.  Three-year-old cars from both the private and fleet sector are being affected more severely. This will in part be due to the level of new car registrations that took place in the new car market 3 years ago.

It is also important to note that whilst retail pricing is reasonably steady, the compromise has been in how long it has taken to sell each car. This is the difficult piece at the moment where the sales teams are having to demonstrate extra justification and greater value for the customer into each deal. The reality is that it may not be worth dropping the retail price if all the dealers are facing the same situation as this does not guarantee a quicker sale. Tenacity and resilience may be the correct approach.

The final glance at the used car market this month is a view of what is happening with the pricing of Hybrid and Electric vehicles. The new car market for diesels is still contracting and Hybrid and specifically Electric vehicles appear to be the flavour of the month. The question is whether that is being replicated to quite the same degree in the used market. The following chart looks at the performance of used diesel cars at key age and mileage profiles as a percentage of original cost new:-

Data powered by

This chart is fascinating as it highlights the current advantage of working with Retail driven insight. Both these propulsion types are in fairly low volumes in the used car market and as such wholesale driven pricing is largely just an exercise in subjective value creation. Even working with large data volumes, pricing requires complex data science to interpret the market accurately.

Firstly, the data here highlights the instability of the two and three-year-old BEV market. This is seen by virtue of the fact that the pricing is very similar from November 2018 onwards despite a year’s difference in age. In contrast, one-year old BEV product shows improved pricing stability at a significantly higher value than older variants. This is likely due to the improvements in specification over time but more importantly the driving range.

Looking at the Hybrid data and it is evident that there is greater pricing stability as all lines remain fairly flat across the twelve-month period. There is also a consistent gap between the value of each age and mileage profile which is similar to the pattern exhibited by ICE cars. Finally, there has also been consistent retail price increases at all age and mileage profiles which supports the view that consumer demand for alternative fuel vehicles is increasing.

To summarise, August has been another bumpy month for both new and used car sales in the UK. This time of year may traditionally be more difficult from a sales perspective but the political and associated economic challenges are an unwelcome complication. As it stands today this position looks set to continue until early 2020. Indeed, we may see another general election and new prime minister coming to the fore to conclude the Brexit process in the coming months and as such stability and recovery seems quite a way away.

Cazana’s truly live retail-driven data is unique in providing up to the moment market insight and intelligence being driven from over 25,000 websites each day in the UK alone. Seeking more focussed information relating to specific market sectors or time periods ensures maximum vision and the most comprehensive insight required to maximise profit, ROI and asset management. With market conditions shifting  and the used car market becoming more of a challenge, top quality up to the minute commercial data will identify market variations quicker than any other data provider and will be vital to ensure modern automotive organisations are in a position to make the most effective strategic decisions.


Cazana Does Charity: London to Lands End Micro Car Challenge

We are taking Bamby on tour to raise some money for local charities! Yes, you heard that right we are taking our little three-wheeler microcar on a charity drive in October (18th-21st)! And, there will also be a Tuk Tuk involved in this charity drive and hopefully, you and your silly microcar will also join in this fun day.

tuk tuk
Kieran Fisher our Business Development Executive in his Tuk Tuk

What’s the route you ask? We will be putting the pedal to the metal and driving from Cazana’s headquarters in London to Land’s End Landmark Attraction with stopovers in Hook, Sparkford, Yeovil and Holsworthy. The full route is roughly 339 miles.

It will be a wheely good day for good causes! Two of the wonderful charities we are hoping to raise money for is Prostate Cancer UK and Ilfracombe Round Table

Over 47,000 people are diagnosed with it each year, resulting in about 11,000 deaths. However the fantastic work Prostate Cancer UK and other organisations do enable 84% of people diagnosed to survive, and we want to keep that hard work and research going.

Ilfracombe Round Table is a group of young men looking to make a difference in their community and have fun while doing. They support the local community by raising funds and volunteering at various events. They are best known as organisers of the annual Birdman competition, the single busiest day in Ilfracombe’s annual calendar, where thousands flock to the pier for a day of music, fun and flying machines.

Does this crazy challenge sound like a bit of you? Do you own a microcar and want to get involved? If the answer is a yes then please, join us in October (the 18th until the 21st). You can register your interest here and we’ll be in touch with more information.

Make sure to follow us on social media for regular updates on this event and if you have any questions at all then please don’t hesitate to reach out to us on


Cazana & Experian’s new product revolutionises dealer pricing and provenance

In this fast-changing market dealers need accurate, real-time insight on which cars to buy, their provenance and how to price vehicles appropriately to attract consumer demand. The companies’ new joint offering combines Experian’s AutoCheck with Cazana’s award-winning Companion pricing tool to offer dealers a single product for vehicle acquisition and pricing.

The system is being launched to thousands of dealer customers this August to help them better understand the vehicles they are working with. The product includes a new version of Experian’s AutoCheck platform which, now powered by Cazana, including Cazana Companion’s valuation and vehicle market research technology. The availability of these stock insights and dynamic pricing data within the tool helps retailers target the right vehicles to stock, respond to market changes quickly and maximise profit.

Experian’s AutoCheck product itself now also includes Cazana’s vehicle valuations to help dealers understand the real market value of vehicles when they buy from auction or part exchange. This is the second partnership entered into by the two companies having previously brought forward their reseller agreement in the UK financial services and banking sectors to help lenders make better informed risk decisions on the vehicles they finance.

Cazana’s CEO Tom Wood commented:

“This product launch is testament to the hard work of the Cazana and Experian teams over the past 12 months. Whilst Cazana’s data is already used within many of the top dealers in the country, this new product elevates Cazana to being one of the largest vehicle valuation providers in the UK. We’re extremely happy to be making our real-time market data and insight available to more dealers to help them maximise profitability in this fast-changing market.”

Experian’s Managing Director of Data Services, Lisa Fretwell, said:

“We’re excited to be working with Cazana to bring a product to market which can make a difference to dealers’ bottom lines. Motor traders need high quality data at their fingertips to make the best decisions when deciding which car to buy. The service we have created by teaming up with Cazana will help dealers to get an edge on the competition by providing real-time information on which cars they should put on their forecourt.”

Cazana’s Used Car Market Update for July 2019

July is an interesting month at the best of times with market conditions driven by a myriad of variables not least of which is the strength of consumer demand. For 2019 there has been much discussion around the decline in used car performance and there is little doubt that this has been a reality although the level of decline is a moot point. There has also been a plethora of comments on the performance of dealer groups nationwide and the City and markets have watched carefully as the half-year financial results of the large dealer groups have been announced and it is interesting to note that despite the negative comments the outlook has not been all doom and gloom. As a nation and specifically an industry, there is a tendency to seek to find the bad news in any situation whereas some of the larger dealer groups have posted a reasonable performance which is something the industry should do well to focus on.

In recent weeks the country has watched in stunned amazement at how the political leadership has changed in what some might describe as a unique way. However, the good news is that we appear to have a prime minister keen to deliver on the countries desire to leave the European Union in the timescale stated. Irrespective of individual political views, the key is that there is a firm plan and an absolute timescale by which UK, European and World markets can work to, which is perhaps the clarity that has been missing since the initial referendum result.

With this in mind, there is a train of thought that both consumer and business sales can begin to stabilise. UK and European businesses can now plan ahead as the timescales have been set, albeit with two alternative outcomes with a hard Brexit perhaps more likely given that Europe have confirmed they are no longer willing to negotiate further. It is also prudent to consider that planning over the next few months will also have to account for the usual market influencers that come with the time of year. The schools are now closed for the summer break and this can often make retail demand less consistent especially when the weather also has a part to play and the last week or so of July proved that buyers do not like looking for cars when the sun is out and the mercury high in the thermometers.

Having acknowledged the issues surrounding the July market, it is important to recognise that the market did not just stop dead and that the vibrant digital marketing campaigns put in place in the last 8 weeks have continued to bring rewards for those with sales teams prepared and trained to follow up swiftly and professionally once a consumer engages. Whilst enquiry levels continue to be lower than desired tenacity and speed of response has still resulted in sales and interestingly despite continued comment on the collapse of used values by some market data providers used car pricing has not been in the freefall some might have you believe. Using realtime retail driven data gives clarity, consistency and reliability in data provision that has been lacking for some years now.

The following chart shows the comparison at key age and mileage profiles against the same period over the last two years:-

Data powered by

The chart reports on the market by highlighting the performance of pricing as a % original cost new using retail pricing as this is the largest data source available to the industry. This chart confirms the fact that retail pricing is not on a steep downward trajectory. In comparison to the same period last year, all age and mileage profiles have shown a one percentage point decrease which is more in line with a healthy market movement the industry might expect. For the time being the days of static retail pricing have passed.

What is of more interest is the movement of pricing for the Ex PCP profile cars at two and three years of age over the last two years. The largest downward movement has been for three-year-old cars that have seen pricing drop 3 percentage points. It is possible that this is because of the type of car coming back to the market and an increase in the number of volume brand cars in the market might produce a poorer residual performance. However, there has been a 5.4 percentage point increase in average cost new over this time which is broadly in line with the increase in cost new over the time period thus inferring that it is a mix of volume and demand that has been the cause of the decline.

However, this is not the same for cars in the two-year-old age profile as the average price of cars advertised for retail sale has increased by 12% over the two-year period. This would suggest that there has been an increase in the higher priced premium brands coming to the used market. A more detailed analysis of the data would corroborate the link between new car registrations of key premium brands two years ago and the supply of those cars coming back to the used car market.

The other consideration here must be what is happening with propulsion types as there is much consternation over the immediate future of diesel. Despite the acknowledgement and fact that Euro 6 diesel engines are no worse for the environment than a modern petrol engine, new diesel sales remain on the decline. The question is what has happened with used car retail prices, as anecdotal market discussion and other valuation providers will have the market believe that pricing has dropped considerably.

The following chart looks at performance of used diesel cars at key age and mileage profiles:-

Data powered by

This chart is of particular interest as it immediately shows that used diesel fuelled vehicles are not in major pricing difficulty. Wholesale anecdotal comment that nobody wants these cars is just not supported by the Cazana retail data and this rhetoric is more likely a pricing negotiation tactic on behalf of the buyers. Retail consumer demand broadly remains good with stability evident at both 1 year old and 4 years old.

The retail pricing movement at 2 and 3 years old is clear although the key is the stability over the two-year period. There has not been any significant drop in values. These age and mileage profiles would expect to see a drop-in pricing due to the increase in volume as a result of new car sales activity using PCP finance products but what this chart really highlights is the continued consumer demand for diesel cars.

In conclusion, it is acknowledged that July 2019 has been a more difficult month for used car sales. The upcoming new car registration data from the SMMT is likely to show a further drop in new car volumes, unless there was a further increase in pre-registration as was apparent in the first half of July but the good news is the new car market will stabilise towards the end of the year. With the political situation supposedly resolved, consumer confidence that was lacking in July will probably build and the nation will begin to plan ahead again. Retail pricing confirms that despite some claims, the market whilst tougher is still in fair shape.

Cazana’s truly live retail-driven data is unique in providing up to the moment market insight and intelligence being driven from over 25,000 websites each day in the UK alone. Seeking more focussed information relating to specific market sectors or time periods ensures maximum vision and the most comprehensive insight required to maximise profit, ROI and asset management. With market conditions shifting  and the used car market becoming more of a challenge, top quality up to the minute commercial data will identify market variations quicker than any other data provider and will be vital to ensure modern automotive organisations are in a position to make the most effective strategic decisions.

Cazana’s Used Car Market Update for June 2019

Generally speaking June can be a stable used car month for the UK Automotive industry and surprisingly, given the unique political backdrop at the moment, it would be fair to say that 2019 has not been an exception. Consumer footfall has varied depending on the source of information that is reviewed and much can be said of the quality digital marketing campaigns that have in many cases proven invaluable to dealer groups seeking to keep a steady stream of used car buyers coming to their forecourts.

Keeping customer engagement is absolutely key right now and maximising buyer interest and subsequent sales continues to be one of the greatest challenges facing dealers today. Recent press releases have shown varying financial performance results for the largest dealer groups and this has been a surprise for some. The reality is that for the last few years used car sales have been very consistent and as such many businesses seem to have become a little complacent. Staying in front of the competition and making timely commercial decisions has never been easy, but the emergence of realtime big data solutions means that help is at hand. Comparison of historical performance against what is happening today helps guide forward thinking dealers to enhanced success.

Looking forward is essential and reviewing the sales performance in other retail sectors can be helpful at times whilst also serving to highlight that matters could be worse for the automotive sector. The latest consumer confidence chart from Trading Economics shows another drop and this is likely to reflect the Johnson-Hunt political battle and the continued Brexit malaise. None of the parties give the population confidence that they are doing anything other than seeking their own security.

Looking directly the performance of the used car market and the picture is more balanced than it might first appear. Yes, customer attraction and retention are very important but sourcing the right stock is also vital and often more difficult than expected. New car supply constraints in the last 9 months have meant that finding certain types of used cars to meet demand has been difficult and this continues to be the case for some vehicles. However, supply for certain models is beginning to ease and from a market profile perspective certain sectors are beginning to show signs of oversupply.

Acknowledging where there are issues and where supply is easing is critical to being able to buy and stock the forecourt appropriately. In recent weeks the market has shifted slightly and retail pricing has shown a little more volatility for certain vehicles.

The following chart shows the comparison at key age and mileage profiles against the same period over the last two years:-

full retail market performance

Data powered by

The data in the chart measures retail pricing as a % of original cost new and therefore directly reflects market activity driven by the consumer. Year on year this chart highlights some interesting trends. As in previous months the quick turn sub 12-month-old profile continues to outperform recent years with pricing up 2 percentage points over June 2017 and 2018. This is probably a result of lower pre-registration activity following the introduction of WLTP and is to many, a welcome surprise. Stability appears to have returned to the 2-year 24k ex PCP profile and contrary to last month, pricing remains in parity with the same period last year although lower than in 2017 by 2 percentage points.

However, the 3-year-old product appears to be the issue this month as there is evidence that at both ex PCP profile and ex Fleet profile retail pricing has softened. Ex PCP cars have dropped in price by 2 percentage points when compared with the levels of the 2 previous years and presumably reflects the sales push in the new car market three years ago. However, ex fleet profile cars have dropped by 3 percentage points. This is likely to be due to the fact that more cars are coming to the market as fleet sales three years ago were strong and product is now being defleeted at the contracted age and mileage due to new car supply facilitating company car driver orders rather than causing delivery delays.

Last month’s Cazana market data highlighted that there was some weakness in the 2 year old ex PCP profile retail pricing and this month this weakness appears to have shifted. Given that there appears to be some instability for the PCP product, it is worth understanding what is happening at a more granular level. Market analytics are a critical indicator of where there may be pricing weakness and a potential reduction in profit, so understanding what is happening from realtime information can be an exceedingly valuable asset to current less informative market intelligence sources.

The following chart looks at performance of ex PCP cars at 3 years old and shows diesel propulsion against petrol.

used car market performance

Data powered by

Looking at these traditional propulsion types and it is interesting to note that it is petrol powered cars that have seen the largest decline in pricing over the same period last year. A drop of 3 percentage points is significant in today’s largely balanced used car market. This shift is potentially due to the pressure that was put on the private sales sector from some of the key OEM players 3 years ago who were keen to be pushing smaller petrol engine cars on the consumer post dieselgate. At this point new car diesel supply was actually still difficult as specifically the VAG group struggled to get diesel engines compliant and on sale.

The other point of specific interest in the chart is the drop-in diesel pricing in July 2018. The initial reaction may be that the data does not read consistently, but this coincides with a period of particularly bad diesel focussed press. July is the only blip that takes the overall trend away from that of petrol-powered cars.

Considering Cazana review the whole market in realtime rather than working on just wholesale information, it is interesting to see that some market commentators have continued to report significant market wide used car value drops, although recent less sensationalistic releases have been welcomed by the industry given the disconcerting tone of the message given. The reality is that market pricing is driven by the retail consumer and not the wholesale market and has been for some years, rendering trade driven market pricing models as outdated methodology. This has been proven over the last couple of months as competitors “realign” their values to the market having in all likelihood been unable to manage market wide manual editing processes in a timely manner.

To summarise, the June used car market has proved to be challenging for many amidst perhaps unfounded warnings of heavy vehicle value drops and a still unique political backdrop. The reality on pricing is that the market seems pretty stable, although attracting and then closing customers is still tougher than it has been for some time. In addition, financial performance of some of the key UK dealer groups has been wide of the mark but this just serves as a wake up call that the used car market is not as easy as it has been in recent years.

Cazana’s truly live retail-driven data is unique in providing up to the moment market insight and intelligence being driven from over 25,000 websites each day in the UK alone. Seeking more focussed information relating to specific market sectors or time periods ensures maximum vision and the most comprehensive insight required to maximise profit, ROI and asset management. With market conditions shifting  and the used car market becoming more of a challenge, top quality up to the minute commercial data will identify market variations quicker than any other data provider and will be vital to ensure modern automotive organisations are in a position to make the most effective strategic decisions.

Cazana and Experian partner to improve understanding of risk in automotive market

Experian is adding Cazana’s award-winning vehicle valuation data to its customer credit data to enable innovative vehicle lenders to understand the risk of both the customers and the vehicles they offer finance on.

Cazana’s AI technology provides an accurate, alternative view to traditional methods for the current and future value of vehicles, both of which are an essential part of the lending process to ensure a low risk, fair priced finance product is offered to car buyers. VC-backed Cazana, founded in 2013, already boasts a number of the largest insurance, dealer and finance customers in the UK who are using Cazana’s real-time data to make better informed decisions on the vehicles they work with.

Tom Wood, CEO at Cazana commented:

“We’re extremely excited to have partnered with Experian to bring our vehicle data to more lenders within the UK financial services sector. Experian’s reach and credibility in this sector is unparalleled and we’re delighted that they have chosen to partner with Cazana as a preferred valuation provider within the sector” he went on to comment on the growing Cazana team “this latest partnership is testament to Cazana’s innovative approach to vehicle valuations, possible only because of our stellar team of developers and data scientists. We’re very pleased to have secured a distribution partner in Experian which will really accelerate our mission to become global vehicle valuation provider of choice”

Experian will be Cazana’s exclusive distribution partner in the financial services and banking sector for the next five years. Lisa Fretwell, Managing Director of Data Services at Experian, commented:

“Our partnership with Cazana is really exciting for our automotive customers as they use data to create a competitive advantage for their businesses. Cazana brings real advances in vehicle valuation data to increase accuracy throughout the lending lifecycle, allowing our customers to make better decisions, sharpen their business effectiveness and drive customer loyalty.”

Cazana is enjoying a very successful 12 months having raised a £2.6m Series-A investment earlier this year, acquiring Car & Classic in late 2018 and becoming recognised by the Financial Ombudsman Service as the first new recommended vehicle valuation provider in decades.


Cazana’s Used Car Market Update for May 2019

The month of May can be a contradictory one for the used car market as it benefits (if you are positive minded) from two Bank Holiday weekends. This does give the “holiday happy” retail consumer a number of alternatives of things to do with their free time and as such it can prove a challenge for dealers who need to generate business over those weekends. That said with the right events and promotions a Bank Holiday weekend can be a very profitable sales period even if the weather is fabulous.

There is little doubt that May 2019 has been a harder month than of late and this has given some valuation providers the opportunity to blame the need to edit values back to the true market level on more difficult used car market trading. Using realtime information has never been so important and as such the true picture is actually far less worrying than some may have you believe and there is certainly no need to heavily write back stock values, as the market movements whilst evident are not severe.

Many people have tended to forget that the industry has been through an extended period of increased demand for used cars driven by the reduction in new car demand and also the fact that economic concerns have driven many buyers to look at cheaper used cars instead of new ones. Couple this with the improvement in used car finance propositions and the market has understandably remained buoyant as consumers have been given the means to buy what they want at a sensible monthly retail price thus driving the used wholesale pricing.

The chart below shows the comparison at key age and mileage profiles against the same period last year:-

full retail market performance

Data powered by

The data in the chart reflects the pricing and movements as a % of Original Cost from a Retail perspective and it is retail pricing that drives the wholesale market these days. The data in this chart is key as it shows that the market has moved slightly year on year, a trend identified a couple of months ago. There is still strength in the sub 12-month-old sector where retail prices have increased by 3 percentage points when compared to the same period last year. The trend of the last 2 months around 2-year-old and 24k ex PCP product has continued with a drop-in retail prices of 1 percentage point in comparison with May 2018.

Interestingly, 3-year-old cars at ex PCP mileage have increased by 1 percentage point over the same period last year and this may reflect the fact that cars on 3 year deals have been early changed as credit agreements fall into a positive position and consumers can get in a new car. This ties in with the drop in 2-year-old retail pricing which is under pressure due to a volume increase. Finally, the 3-year-old ex-fleet car has seen a drop of 1 percentage point in retail pricing perhaps reflecting the proportional strength in the new fleet car market and the increase in defleeted cars.

The other area of the used car market that has come under scrutiny of late has been the Alternative Fuel Vehicle sector. New vehicle registrations for these cars continue to increase as buyers seek to reduce taxation liability and follow the sometimes-erroneous belief that these cars are economical to run and good for the environment. In a few cases this may well be true, but as many have discovered the writing on the tin does not always convey what’s actually inside.

The chart below looks at performance of Hybrid and EV’s over the last 12 months as a % of Original Cost New:-

Hybrid-and-Electric-Retail-Price-Performance-as-a-of-Original-Cost-New-in-the-Last-12-MonthsData powered by

The data in this chart is fascinating as it clearly depicts the rise in popularity of the new propulsion types in the used UK car market. The data also reflects the sensitivity of this market profile of the vehicle and the evolution of the retail pricing. It is astonishing to see that the 24-percentage point difference between 12k/12k electric vehicles and the 24/24k product has narrowed by 8 percentage points in the last 12 months. The stability of retail pricing for the latter profile has been getting better as time progresses but it is clear that this has been a delicate market and that has been due to volume and desirability of cars that arguably have compromised range, by today’s standards.

The Alternative Fuel Vehicle market is shaping up to be a vibrant and somewhat volatile place. With the product still in its infancy there is the danger that as new versions become available for sale the superseded models may drop in popularity very quickly. It is also likely that as volume increases the performance against cost new will also decrease and this may happen quite rapidly.

In conclusion, May once more proved to be a tougher used car market although demand is still there are retail pricing has largely not fallen in a bid to drive used car sales. Indeed with 2 of the 4 key age and mileage profiles recording an increase in pricing over the same period last year the data argues that the market is still in good shape. The value of looking at the complete used market assists with this and no one platform can compare with whole market data and reliance on manual editing is no longer good enough for businesses operating in this business space. The coming weeks will be fascinating but as it stands today there is no need for panic as there is good retail business to be done.

Cazana’s truly live retail-driven data is unique in providing up to the moment market insight and intelligence being driven from over 25,000 websites each day in the UK alone. Seeking more focussed information relating to specific market sectors or time periods ensures the maximum vision and the most comprehensive insight required to maximise profit, ROI and asset management. With the continuing Brexit confusion at an all-time high, top quality up to the minute commercial data will identify market variations quicker than any other data provider and will be vital to ensure modern automotive organisations are in a position to make the most effective strategic decisions.

Cazana’s Used Car Market Update for April 2019

Traditionally the used car market in April is buoyant and there are plenty of retail buyers on the forecourt but that has not been the case in 2019. This year Easter fell particularly late and brought with it, outstanding weather and this complicated matters for the used car retailers as consumer focus moved to the garden and other leisure pursuits rather than buying a car, resulting in a much slower weekend than normal. In a market that is being ravaged by uncertainty at the moment this additional distraction was not welcome and for many, sales levels over the weekend were considerably lower than expected and required to keep to pre-determined budgets. As such performance concerns ran high for the month as a whole.

The new car market was no support to the retailers either and the drop in registrations of 4.1% came predominantly from the private market and perhaps highlights where the current issues really lie. Like it or not the country appears to be in the grip of Brexit and concerns really are impacting all retail markets that sell “big ticket” items. UK Consumer confidence levels remain at almost the lowest point for the last year with little hope of improvement as highlighted in the chart below:

UK Consumer Confidence

Source – Trading Economics

The current deadlock for the government is not only damaging the economy but it is also embarrassing for those politicians involved and the UK as a nation on the world stage. It has established very clearly that those involved are more worried about their own agenda’s than that of the country and the general population that trusted them to deliver a solution following a referendum that many feel did not really explain clearly what was being asked of the voters. Further delays will damage the economy, the country and credibility of self-centred political individuals. Action is required now with no more empty long term promises, to enable businesses nationwide to start to thrive again.

However, despite the growing shift in the market the realtime used car pricing data shows remarkable resilience at the moment. The chart below shows the performance of used car retail pricing at key age and mileage profiles:-

cazana data graph may 2019

Data powered by

The data in this chart compares Retail pricing as a percentage of original cost new at key age and mileage profiles for the month of April 2019 with the same period in the two previous years. The industry is now beginning to see some changes in retail prices as highlighted and whereas the data month on month showed great strength across all market sectors, performance by age and mileage profile is becoming less predictable highlighting the need for regular insight and intelligence and dynamic pricing to take advantage of short term market windows of opportunity.

It is interesting to note that two-year-old ex PCP profile product is one percentage point lower than the same month last year and this is not the first time this has been the case in recent months. Looking at slightly older three-year ex PCP profile and the picture is marginally different with an improvement over 2018 although still slightly lower than in 2017. Conversely the higher mileage ex Fleet product has taken a drop in April which is interesting as volumes in the used car market for the month were still purported to be lower than expected. Therefore, this perhaps suggests that retail consumers are happier buying a lower mileage car for the time being.

However, it is the Quick Turn sub 12-month-old profile that is of most interest here as it is the only key age and mileage profile that has shown a marked increase in retail pricing. This sector has been improving for some time now and to some there has been an element of surprise as to why vehicles of this age should be performing so well. However, this sector has been in a perfect storm for a few years and it has been difficult to predict what would happen. The playground of the OEM’s and the rental companies, this is a market profile that can be both volatile and brutal with some very pointed short-term volume peaks and troughs that can only be properly identified and addressed by realtime data ensuring maximum market visibility and profit opportunity.

The chart below shows a more detailed view of pricing movements over the last 12 months split by fuel type:-

full retail pricing performance graph

 Data powered by

This chart is key as it reveals that the overall two percentage point increase in retail pricing identified in the previous chart is not reflected in both fuel types. In fact, it is diesel cars that have driven the overall increase in the data. Generally speaking both fuel types have followed the same market pattern too, although there has been greater stability around the diesel market. This is logical considering that new diesel car registrations have been hit so hard in the last 12 months meaning there are less examples in the market. It also confirms that there is still strong demand in this age and mileage profile for this type of vehicle.

It is also wise to factor in that this sector has benefitted from a lower volume of product being pushed to the market. There is a hiatus in used car pricing in September and October just at the point that the introduction of WLTP was having its biggest impact on new car registrations due to restricted supply and at the same time minimising pre-registration activity and thus pressure on late plate retail pricing.

In conclusion, April has been tougher than it should have been and the reason is the impact of the indecision around Brexit and the influence it is having on consumer confidence. Whether the UK leaves or stays it is vital for the economy that a decision is made and business can get a grip on the future of their respective markets and plan accordingly. Realtime unedited data will help the automotive industry react to sudden and short-lived market variations and help maximise profit.

Cazana’s truly live retail-driven data is unique in providing up to the moment market insight and intelligence being driven from over 25,000 websites each day in the UK alone. Seeking more focussed information relating to specific market sectors or time periods ensures maximum vision and the most comprehensive insight required to maximise profit, ROI and asset management. With the continuing Brexit confusion at an all-time high, top quality up to the minute commercial data will identify market variations quicker than any other data provider and will be vital to ensure modern automotive organisations are in a position to make the most effective strategic decisions.


Cazana’s Used Car Market Update for March 2019

The used car market in March was a story of two halves and market sentiment would appear to suggest that the retail consumers were more fickle than they have been for some time. This should not have come as a surprise as March can be a complex month given that the new registration plate often draws attention away from used cars to the new car market. Combine this with the unbelievable farce that the government call Brexit and lower footfall and reduced enquiry levels were almost a given. However, the new car market decline in registrations of 3.4% over the same period last year, whilst disappointing, also helped the used market as a lack of demand for new cars appears to have shifted enquiries to the used car market.

There has been a great deal of speculation as to when the used car market will start to slow down and if one were to listen to some of the anecdotal discussions in the trade as a whole today, then March may have been deemed the turning point. The reality in today’s modern auto retail market is that the facts come from the retail market, the consumer and not subjective discussion and manual intervention in pricing structures.

The chart below shows the performance of used car retail pricing at key age and mileage profiles: –

cazana data

Data powered by

The data in this chart compares Retail pricing as a percentage of original cost new at key age and mileage profiles for the month of March 2019 with the same period in the two previous years. It is clear that in all but the 24-month-old ex PCP profile, retail pricing has not weakened. As identified and explored in last month’s release the two-year market is perhaps just beginning to become a problem and this will be entirely due to the practice of OEM’s moving the customer to a new car once parity on value and outstanding balance is met. The performance of the Quick Turn sector continues to remain solid still boosted by the lack of new cars being pre-registered and retail pricing is 4 percentage points higher than at the same time in the previous 2 years.

Changes in the shape of the new car market will in time force a shift in the used market, and the most obvious distortion to the new market in the last couple of years has been the volume of diesel cars being registered as new. Whilst many may see that as laudable, often because they are ill informed on the emissions data, the used car buyer remains a big fan of diesel-powered cars. With what now appears to be a very real demise of diesel in the new car market for the short term, there has come an increase in hybrid and electric sales. New vehicle registration data highlights that alternative fuel cars have now taken 5.8% of the market year to date and this is a 14.7% increase year on year which is beginning to rise to the levels needed to bring the country in line with emissions aspirations and targets.

With changes of this proportion in the new market it will now be essential to monitor what is happening in the used car market. The chart below tracks the used car pricing performance by fuel type across the last 12 months at the key ex PCP age of 2 years :-

cazana data

Data powered by

This chart is important because it shows very clearly the strengthening in retail pricing of both hybrid and electric vehicles which directly reflects the success in the new car market. These are the only two propulsion types to demonstrate a clear upward move in retail pricing terms in a market age profile that is currently experiencing a marked increase in volume. Hybrid pricing performance is more steady than electric and shows a 3-percentage point uplift over the previous 12 months and this undoubtedly reflects the greater retail consumer confidence in these cars. It is also very interesting to acknowledge the significant upturn in pricing levels just before and after the removal of the Plug In Car Grant. Electric propulsion pricing strength is attributable to the greater volume of cars coming to the used market with more usable driving ranges.

It is also significant to note that diesel prices have fallen by just one percentage point year on year whilst petrol has remained steady. For some, this is seen as being very lucky for diesel by comparison to the new market and yet at the same time concerning that demand is still so strong for a polluting fuel type. With volumes so significantly affected there are a number of residual value forecasters increasing forecast values on the back of this data and something easily identified by using Cazana Horizon to review and set forecast values.

In summary, March was a tougher month than some businesses expected and there is little doubt that wavering consumer confidence driven by Brexit concerns was to blame. There is nothing that the industry can do for the moment other than get used to the fact that the ride is bumpy. However, whilst it may be more difficult to do business, demand is still evident and pricing is as steady as it has been in the last 12 months but the key will be to be aware of all market factors and to use as much real time data as possible to stay in tune with market fluctuations to ensure the best return on investment.

Cazana’s truly live retail-driven data is unique in providing up to the moment market insight and intelligence being driven from over 25,000 websites each day. Seeking more focussed information relating to specific market sectors or time periods ensures maximum vision and the most comprehensive insight required to maximise profit, ROI and asset management. With the continuing Brexit confusion at an all-time high, top quality up to the minute commercial data will identify market variations quicker than any other data provider and will be vital to ensure modern automotive organisations are in a position to make the most effective strategic decisions.

Cazana’s Used Car Market Update for February 2019

Following a disappointing January, the positive news is that according to the SMMT new car registrations during the month of February 2019 increased by 1.4% over the same period last year with almost 82,000 vehicles registered. This is good news for the industry and perhaps heralds the start of a better balance to the new car market that will last for the rest of the year despite the economic difficulties that may present themselves as Brexit stumbles towards a conclusion. Whilst the prognosis is for a reduced market in 2019 and a Cazana forecasted decline of 1.8% in total registrations in comparison with 2018 it will be better managed by franchised dealers if there is a stability factor and no heavy market swings.

Looking in more detail and diesel registrations continue their downward trend with a further decline of 14.3 percentage points over the figure posted in February 2018. At just over 24,000 units this represents only 29.6% of the total market volume during the month and a market share reduction of 5.4 percentage points in comparison to last year. It is hard to comprehend how quickly diesel sales have declined and contemplation of the driving factors is a subject matter worthy of its own detailed analysis.

Petrol powered cars took some of the volume lost by diesel models with an increase of 8.3% and AFV’s posted what looks to be a considerable 34% uplift in registrations. Petrol cars now represent 64.9% of total market share up 4.1 percentage points on February 2018 and AFV’s 5.5% which is 1.3 percentage points higher than in 2018. It would seem that the recent press comment that Hybrid sales have significantly increased may have been anecdotal as the 34% uplift represents just 1147 cars which whilst heading in the right direction is not a fast enough run rate to meet future volume aspirations and targets. This has been made a more difficult transition by restrictive and unclear government legislation.

Looking at the market profile split and it shows that sales to the private buyer increased by 4.3% over the same period last year and that reflects the normal buying pattern for February where attractive PCP and finance deals are offered to keep new car stock moving to the private buyers. The fleet market is down by 1.3% and this is likely to be due to supply constraints on key fleet models as a hangover from WLTP issues last year. The business sector showed a remarkable 23.4% uplift over February 2018 although this represents just 1.5% of the market share and 226 units.

However, it is interesting to review the registration data at a manufacturer level. Two of the three key Premium German brands show stability in registration volumes although Audi appears to be still struggling with registrations down 16.76%. As a direct comparison, Jaguar registrations were up by 34.28% and Volvo by 48.26% although the latter is perhaps due to better availability of reasonably new models. Glancing through the list overall it would appear that some of the small to mid-size manufacturers have had the opportunity to play catch up this month and although year to date figures show a better balance, there are some interesting stories in the data year to date.

Shifting focus to the used car market, and February has not been the shining star that many had hoped for. There is little doubt that the retail consumer has been more difficult to find and close than in recent months. February is always a challenge because stock can be a little short as the new plate change approaches and new car buyers hold on for the “new number” delaying the feed of used cars to the market. Also, anecdotal trade discussion traditionally denigrates the time of year almost jinxing activity for the less proactive dealers not using live retail insight. Some franchised dealers are focussed on preparing for March and others are contemplating March used car sales events to give their business a boost and make the most of increased stock volume from part exchange activity and improved availability of ex fleet and contract hire stock that will filter through from mid-March.

But to be clear, used car demand was still there but closing the customer has been more difficult and interestingly it was not solved by offering a discount on price. It would appear that the commitment to buy is around confidence in personal circumstances and what effects there may be from the upcoming Brexit conundrum. Common sense tends to prevail and the deal is done but it is interesting to observe this behavioural pattern and work with a subjective and emotional viewpoint.

The chart below looks at retail pricing performance as a percentage of original cost new for some of the key age and mileage profiles in comparison with the same month over the past 2 years:-

cazana data

Data powered by

This chart highlights the fact that used car retail pricing has not fallen at sector level when comparing with the same period in 2018. Whilst prices for ex PCP cars at 24k and ex Fleet cars at 60k have mutually dropped by one percentage point since 2017, the year on year comparison shows either parity in pricing or an increase of between one and two percentage points market wide. However, detailed analysis always gives a clearer picture.

It is also interesting to note the positive impact on pricing in the quick turn sector as a result of the drop in pre-registration activity. Likewise, the strength of pricing for three-year-old ex PCP cars is also of interest and perhaps reflects a shortage of used car stock. This is probably due to the propensity for OEM’s to take customers out of PCP deals as soon as the value of the customer’s car matches or marginally exceeds the current value, giving the opportunity to generate a new car sale. This therefore goes part way to explaining why ex PCP cars at 24 months old have stayed at the same pricing point as a percentage of original cost new as there are clearly more examples in the used car market.

On the topic of PCP’s the recent announcement by HMRC to change the VAT treatment of PCP deals was something of a surprise. It will be interesting to see how this affects the new car market in the first instance and in time how this will affect the used car customer. For the time being the PCP market looks vibrant although the previous chart did highlight parity of retail pricing at 24 months old. The next chart looks at performance in this age profile by fuel type:-

cazana graph

Data powered by

This chart gives better clarity to the performance of ex PCP cars over the past 2 years and it is obvious that there is now greater residual value strength in petrol cars at this age and mileage profile. In February 2017 diesel powered vehicles had a one percentage point premium over petrol which has now swapped to a three-percentage point premium in favour of petrol cars. The chart also demonstrates the steady performance of petrol propelled vehicles in contrast to diesel models over the period and the trendlines highlight the pricing patterns for both fuel types.

Ultimately this graph demonstrates that detailed analysis gives better insight and as such a competitive advantage. Diesel powered vehicles have in fact dropped as a retail price percentage of original cost new by some 3 points. It will be important to monitor this going forward as this may be the beginning of a downward trend in used diesel car values although it may be due to volumes in the market.

With Brexit almost upon the country and evidence of consumer concern over the future of the economy on a backdrop of poor news from the car manufacturing sector in the UK, the strength of the new and used market must be seen in a positive light that in many ways contradicts what is often seen in the national press. Last month we showed a consumer confidence chart depicting the behaviour patterns of consumers over the proceeding 12 months. Despite the fact that the Automotive Sector out performed this pattern it is wise to be aware of the economy as a whole and factor in potential changes as the month passes.

In conclusion, February brought good new car registration news for the industry at a time when many would have the country believe the economy and prospects are in dire straits. The used car market whilst more challenging, has also been encouraging and this is made clear by the resilience and stability of used car pricing which just would not have behaved in the way it did if there was no retail consumer demand. The coming month will be a busy new car period although used car activity will ramp up as the days pass and retail pricing is likely to remain firm which will naturally drive wholesale demand and trade prices.

Cazana’s truly live retail-driven data is unique in providing up to the moment market insight and intelligence being driven from over 25,000 websites each day. Seeking more focussed information relating to specific market sectors or time periods ensures maximum vision and the most comprehensive insight required to maximise profit, ROI and asset management. With the continuing Brexit confusion at an all-time high, top quality up to the minute commercial data will identify market variations quicker than any other data provider and will be vital to ensure modern automotive organisations are in a position to make the most effective strategic decisions.