Auto trAder MArKet rePort
Worth approximately 90 billion pounds, the new and used
car sale markets is a substantially valuable part of the
wider UK economy, but unlike other industries, it’s been
slow to adapt to wider market influences. Over the last 10
years, the adoption of new digital and mobile technologies
has changed the way consumers buy and sell everything.
The impact of this consumer change has been felt in
every sector, forcing business’ to adapt or in some cases
to disappear. Although the automotive industry is thriving
and both the new and used car markets are in a period of
growth, the industry hasn’t taken advantage of the digital
revolution to the scale of other sectors. Change is on the
horizon though, as progressive retailers, manufacturers,
and marketplaces are starting to adapt in response to the
way today’s consumers behave.
business, and it is this demand that is challenging the
traditional way that car ‘dealers’ do business.
Dealers need to operate as digital retailers to adapt to
these changes, and some already have by adopting
digital strategies to run their business. Many understand
the need to implement multi-channel approaches, so
that the on and off line experience for consumers is
consistent and meets the needs of today’s car buyers.
The more progressive car retailers are also leveraging
data to run their business – which is key to enabling
them to buy desirable stock for their area, at the right
price – to sell for market value.
So although the industry is still on its journey of
digital evolution, it has made some strides, and it’s
these developments that we will explore in our new
As digital technologies play an ever increasing role
in our day-to-day lives, we as consumers expect to
access information anywhere, at any time and on any
device, and this includes researching and buying a car.
As the UK’s largest digital automotive marketplace, we
are able to observe how consumers research their next
car online, and research tells us that consumers spend
on average nearly 11 hours choosing the exact vehicle
that’s right for them. This shift online has created a
‘digital forecourt’, which allows consumers to make their
car purchase decision long before they step foot onto a
This Report, which will be released twice a year with
each new registration plate change, will look at the
major trends in how consumers buy and sell vehicles
today, and how these trends will continue to shape the
future of the automotive industry. We have also spoken
to 5,000 UK drivers, to gain an understanding of what
cars they are buying, how much they are paying for
them, and what they don’t like about the buying and
selling processes. We’ll look at whether factors like
emissions really do matter to consumers, if the concept
of haggling on price is dead, and what the biggest
barriers are in making their next purchase.
The traditional forecourt still has an important role to play,
but it’s no longer the primary destination for consumers
to conduct their research, online marketplaces are
becoming the most important part of the purchase journey.
Consumers expect car buying to be like any other retail
Both the new and used markets experienced significant
growth in 2015, with record-breaking new car registrations
and used car transactions reaching their highest
point since 2008 – all despite the emissions story that
dominated the headlines late last year. The news of a
record breaking year for registrations came at the same
time as tumbling fuel prices lifted moods at petrol pumps
throughout the UK, starting 2016 with a positive economic
outlook and automotive market health.
But the pace of digital change is speeding up, and there’s
more to come – driven by the demands of the next
generation of car buyers; the Millennials. They will expect
digitally-driven services in every aspect of their lives, so
it’s more important than ever that the industry evolves at a
pace that meets these demands.
The industry’s digital evolution is going to be a trending
focus of our Market Report moving forward, so we
look forward to bringing more insight into the digital
developments that will further enhance this hugely
Operations Director, Auto Trader
The death of haggling?
56% of recent car buyers claim to have paid the asking
price or more (including add-ons). Consumers are
checking online prices more frequently, and some car
dealers are adopting new retail, market-led pricing
strategies to stay competitive.
Read more on page 6
VW holds strong used car performance
Despite new car registrations for 2015 showing a dip in market share for Volkswagen, Auto Trader’s Retail
Price Index for used cars shows no significant change in price for VW models. The VW Golf was
also the second most viewed make and model on Auto Trader, (August 2015 - January 2016) with consumer searches for
VW models also showing no change.
Read more on page 11
80% find car buying and
Selling was identified as giving consumers the
most stress, but our research reveals that many
consumers aren’t fully aware of the options
available to them. Lack of awareness is causing
confusion and stressful experiences.
Read more on page 8
Environmental car buying
Only 9% of UK car buyers considered their carbon
footprint when buying their last car. But are consumers
actually more concerned about the running costs that
are linked to emissions, rather than the emissions alone?
Read more on page 11
Diesel used cars now cheaper
The Auto Trader Retail Price Index has shown average
prices for used diesel cars have fallen consistently since
October 2015 – and they are now cheaper than average
used petrol car prices for the very first time.
Read more on page 13
Easing the part-exchange process
81% of car sellers are more inclined to visit a
dealership if they are offered an online part-exchange
guide price on their car in advance. An example of
consumers demanding more online services, which
could help take the stress out of the negotiation.
Read more on page 8
The market review
A consecutive year of strong new car registrations
follows high used car transactions in 2014, which
saw its highest peak since 2008. There were almost
7.2 million used car transactions in 20141, a figure
which we anticipate will be higher in 2015, as more
used cars that are one- or two-years old would have
entered the market.
The entire marketplace has been in a sustained
period of growth – with both new and used car
markets performing strongly in 2015.
These clear signs of high consumer confidence
suggest that any lasting affects the recession may
have had on today’s car buyer are at best, minimal –
with 64% of UK motorists surveyed predicting that in
the next six months the economic situation will either
remain the same or improve.
But it’s not just consumer confidence and economic
recovery alone that’s responsible for growth in both new
and used car markets. The availability of competitive
and diverse finance options (often heavily incentivised)
has made it easier than ever to secure bespoke and
affordable funding arrangements for new or used cars.
Personal Contract Purchase (PCP) agreements grew
again as predicted, accounting for over three quarters
of consumer new car deals and over a third of used
car deals in 20152, as financing used cars becomes an
increasingly popular model amongst UK car buyers.
New car registrations hit more than 2.6 million in 2015
(according to SMMT), posting a record year for the
new car market during what was its fourth consecutive
year of growth. One particular trend that has emerged
from 2015 was demand for alternative fuel vehicles,
which grew by 40%. Hybrid vehicles enjoyed the
biggest new car market share it has held to date,
accounting for nearly 3% for the year.
BCA Used Car Market Report - 2014
The Finance & Leasing Association - February 2016
Driving cost review
Insurance premiums up 19%
Despite fuel costs dropping to their lowest since 2009,
there has been a recent rise in insurance costs for UK
drivers. Insurance premiums on average rose by 19% in
20153, caused by an increase in insurance claims – but
also as a result of the increase in insurance premium tax in
November 2015, which was raised from 6% to 9.5%.
Nonetheless, the overall cost of driving for UK consumers
today is relatively low with all running costs considered.
The UK Government’s greater focus on fraudulent
insurance claims with the launch of an Insurance Task
Force last year, could also lower insurance costs through
combating fraudulent claims; which is estimated to cost
motorists approximately £50 per policy4.
The digital forecourt
almost half of those people (46%) citing the research
process taking longer than expected as the reason.
The way in which cars are bought and sold has
changed radically over the last decade and, like
most things that experience such change; growing
technologies have had a fundamental role to play.
But what is impossible to ignore is how consumer
behaviours have changed. Quicker access to
boundless information has led to more research and
inevitably more informed consumers.
More choice has led to more in-depth research, and
compared with consumers who identified not having the
money as the reason for not completing the purchase
within the six month period (24%) – almost twice as many
consumers identified that it’s time spent on research that
delayed their purchase.
When it comes to finding the right deal, price
transparency in the car market is not much different
from most other markets in the UK. It has led to more
choice than ever before, empowering consumers
further to locate, compare and dig into the detail
that previously would only be found at a car
Consumers spending more time on their car buying journey
has made online marketplaces a more integral part of
the car buying journey, not only in offering information
on demand – but also by offering online
tools to make the process easier for
consumers, so they can make
sense of the growing
number of choices
But while access to extensive information is a benefit
for many, often speeding up the car buying research
process, in many cases it has an opposite effect. Many
consumers find themselves overwhelmed by choice,
and when you consider that Auto Trader now lists an
average of over 420,000 cars a day, it’s no wonder that
many buyers are underestimating how long the car
buying journey will take.
26% of consumers surveyed claimed they intended to
buy a car in the last six months, but failed to do so – with
Compare the Market, data compared year-on-year, January 2016
The death of haggling?
56% of car buyers claim they have paid the
It’s not just more choice that is changing with today’s
consumer. 56% of consumers surveyed who had
purchased new or used cars claim to have paid the
asking price or more (including add-ons). So how has
price transparency, combined with mobile technology
increased car buying research capacity to the point of
eliminating negotiation in so many cases?
with a tradition in forecourt haggling - may be paying
less as a result. But there is arguably a bigger trend
Younger car buyers are using mobile technologies more
than ever to research during the car buying journey.
In fact, 24% of 18-34 year olds claim to have used a
mobile device to validate car prices while on a dealership
forecourt, compared with 9% of those aged 35+.
Well, it starts with the observation that the percentage
of consumers claiming to have paid the asking price for
their vehicle drops with their age – with more younger
drivers paying nearer the asking price or more, than
older car buyers.
Including all ages, 14% of those surveyed had used
a mobile device on the forecourt to fact check –
suggesting that with mobiles playing a more integral
role in the buying journey, consumers are more likely to
benefit from online price transparency by knowing what
price to pay for their next car.
It might be easy to draw the conclusion that older
generations - who may be more familiar and confident
Paid the asking
price or more
of car buyers
17 - 24
25 - 34
35 - 44
45 - 54
55 - 64
Market-led pricing strategies
The growing number of car buyers who are becoming more informed on what
they should be paying for their next car, are being met by more and more car
retailers who are adopting market-led pricing strategies to sell more cars in light
of this trend.
On an average day, Auto Trader sees over 11,000 vehicles
repriced on its website – and with so many car sellers
adjusting their prices to improve the potential of a sale, it’s
clear that listing a car at the right price could save sellers
time and money.
Car dealers becoming
66% of consumers claim they would
consider using a mobile device to fact
check on forecourts in the future
Digitally savvy car retailers are not only beginning to
catch on to the benefits of market-led pricing, but they
have also realised that the emergence of mobile has
enabled more frequent fact checking throughout the
whole buying journey. This has led some to offering free
WiFi for their customers, with some even offering free
phone charging points for mobile devices that enable
car buyers to continue researching right up to the very
point of purchase.
We have invested heavily in our pricing
capabilities to ensure our product always
remains competitive. A team of Pricing Analysts
monitor the market daily and make adjustments
The key success of this strategy has come in
the form of communication and transparency;
and as a result, we have seen a reduction in the
number of people expecting to be able to haggle
over price, or ask for a discount.
Paying the ‘right’ price is no longer a product of
extensive haggling with a car dealer. More often than
not, it’s achieved through comprehensive research,
using multiple technologies throughout the buying
journey – met with more retailers adopting accurate
valuations tools. And with 66% of consumers claiming
they would consider using a mobile device to fact check
on forecourts in the future – it could signal the end for
that ancient negotiating art form we know as haggling.
We are aware that customers have access to
information, and are not afraid to use it. But
because we believe in our product and pricing,
we have implemented customer WiFi in our
stores to help customers reaffirm that haggling
is not necessary, and alleviate any concerns.
This transparent approach has not only seen a
more informed customer come through the door,
it has improved customer satisfaction, alongside
facilitating consumer decisions to add value to
their purchase by taking additional products for
peace of mind.
- Leo Nelson, Marketing Director of CarShop
Making sense of selling
80% of UK consumers find the process of
buying and selling cars stressful
Our recent research discovered that 80% of UK
consumers find the process of buying and selling cars
stressful – with over half claiming to have been put
off from either buying or selling a car altogether. But
considering that more UK consumers claim to be less
confident with selling than buying (25%) – are there key
stages in selling a car that cause this? Or is it simply
a case of the perception of the whole process being
worse than the reality?
One factor could be confusion amongst car sellers when
it comes to the methods of selling and subsequent
financial outcomes. Amazingly, 37% of UK motorists
expect a part-exchange value to be the same or more
than a private value – highlighting a lack of awareness
with consumers when it comes to the selling options
available to them, and the varied financial returns.
Finding the value
The most popular methods of valuing a car amongst
UK motorists is looking at what car prices they see
for similar cars on dealership forecourts, which
accounts for 50% of those surveyed. This method is
often combined with comparing similar cars on online
marketplaces like Auto Trader, a method carried out by
44%. So how do consumer research methods affect
their expectations when it comes to reviewing a partexchange deal?
of their part-exchange – a method which would give a
consumer a more accurate valuation on a part-exchange
or a private sale valuation.
Using comprehensive algorithms*, Auto Trader’s online
valuations tool was used over 1.2 million times by
consumers in January 2016. Tools like this are helping
consumers become more informed about the selling
options and subsequent financial returns available to
them – by offering a reflective value from the current
used car market, as well as an indication of a partexchange valuation, making consumers more informed
on varied financial returns.
Well, 29% of consumers claim to have walked away
from a part-exchange deal due to a disagreement on
the price with a car dealer. It suggests that for nearly a
third of consumers, a lack of awareness of what a dealer
is likely to offer in a part-exchange could be making the
selling process more difficult.
This new way of discovering a valuation - as well as
a part-exchange guide price – is not just good news
for consumers. Our research reveals that 81% of
consumers claimed they’d be more inclined to visit a
dealership if they were offered a part-exchange price
on their car in advance. This is giving car dealers more
sales opportunities at an earlier stage in the consumer’s
buying journey – whilst saving consumers time and
money from face-to-face part-exchange negotiations.
So how can consumers become more informed on their
An encouraging trend is that 43% of those who partexchanged in the last six months claimed they also
used an online valuation tool to determine the value
* Auto Trader valuations are derived from daily price observations
from over 500,000 adverts on Auto Trader and dealer websites, and
over 800,000 trade observations every year, including from auctions,
manufacturer disposals, fleet & lease companies and daily rentals.
When it comes to selling a car, the plan for most car
owners is simple; they want to sell for as much as they
can, within the shortest time possible. And when it
comes to a part-exchange, 45% of consumers claim
they still expect a good price despite the convenience
the deal offers.
However, over a third (35%) of consumers claim that
when it comes to a part-exchange deal, they want to
receive the best price possible, regardless of how long it
takes. Suggesting that despite the convenience offered
by part-exchange deals, there is a significant number of
consumers who value price far more than selling their
The smallest percentage of consumers (19%), claimed
price wasn’t too important and convenience was the
How are consumers
selling their cars?
21% Privately online (e.g. Auto To
16% Directly to a dealer (but not as part-exchange)
4% Privately offline
fline (e.g. newspaper advert)
Most viewed cars
on Auto Trader*
BMW - 3 Series
Volkswagen - Golf
Ford - Focus
Mercedes-Benz - C Class
BMW - 5 Series
Ford - Fiesta
AUDI - A3
BMW - 1 Series
Vauxhall - Astra
Vauxhall - Corsa
In the last year alone, there has been an increase of almost
600,000 cars registered on UK roads – with England
seeing an overall increase of 1.6 million since 20116.
But what cars are consumers searching for at the very
beginning of their buying journey? Looking at the data
generated from over 43 million cross platform visits per
month on Auto Trader – we see more clear signs of the
UK’s huge appetite for premium models – which make up
half of the most viewed car adverts listed on Auto Trader.
But what’s more interesting, especially in light of the VW
emissions story becoming one of the automotive industry’s
biggest ever headlines – is that the model which was
mostly affected by the crisis, the Volkswagen Golf – is the
second most viewed car on Auto Trader.
*August 2015 - January 2016
BBC, January 2016
The V W effect
In September 2015, it was reported that the
Environmental Protection Agency found that many
VW cars being sold in America, in their hundreds of
thousands, had a “defeat device”, or software, which
had effectively cheated emission tests. This discovery
developed further, revealing that approximately
11 million cars worldwide, including eight million in
Europe, were fitted with a device that enabled them to
pass for a lower emission status.
Well, when it comes to considering emissions during
a car purchase, only 9% of motorists claimed their
carbon footprint was considered when buying their
car - but with so many UK driver’s identifying road tax
costs as the fourth biggest concern of running a car –
green thinking could be disguised as economical – as
drivers choose greener models to cut down on road
tax and other costs.
Only time will reveal the full extent of the crisis for VW
and its brands, but one thing we can be sure of is that
when it comes to their next car; price, running costs
and overall reliability are the most important factors for
car buyers – and it seems to be these major strengths
that have seen VW unmoved in its desirability for used
So how did this affect VW in the marketplace? For the
vehicles directly affected, as well as all models that
represent the VW brand?
Despite a dip in market share for new VW models,
which was a 13.9% decrease year-on-year in January
20167, average used car prices for VW models remained
relatively unchanged according to Auto Trader’s Retail
Price Index. Consumer appetite for the affected make
and models didn’t wane either, as online classified
advert views on Auto Trader showed stable results
across the board for the last six months.
Environmental factors are slightly different when
considered at a regional level; with a considerable
19% of recent car buyers in London claiming when
purchasing their car, they did think about reducing
their carbon footprint. The survey response on
environmental car buying in the Capital is even more
significant when compared with the South East (3%),
Wales (3%) and East Anglia (0%).
So what does this tell us about car buyer behaviour
given the extensive wide-spread news coverage of the
VW emissions crisis?
SMMT, new car registrations January 2016
Tax and insurance
Pushing for premium
The affordability of finance options for consumers has
inspired many car buyers to upgrade their search to
more expensive brands. Premium models make up half
of Auto Trader’s most viewed online car adverts over
the last six months.
BMW models account for three of the top 10 most
viewed full page adverts on Auto Trader in the last six
months. The premium brand manufacturer recently
revealed that over 90% of all new BMWs ordered are on
a Personal Contract Plan (PCP).
This trend is very similar to car financing habits in the US,
where the new car market has been driven by renting
rather than owning for much longer than the UK. This
shift is popular for keeping drivers in a new car and aims
to keep the driver with the manufacturer and retailer too,
as a typical agreement lasts three years.
The end of manufacturing
for the masses
When it comes to understanding what car best suits a
buyer’s requirements and personal preferences – the
online world has enabled consumers to research with
these specifications in mind – narrowing down the options
that are closer to ticking all of those boxes from price and
running costs, all the way through to colour, engine size
and even seat stitching.
at the critical stages of their car buying journey – where
confirming even the smallest detail could close the deal.
With online marketplaces like Auto Trader continually
developing online search functionality for consumers –
the online environment becomes a catalyst in matching
a consumer’s specific car search requirements with the
detailed make and model ranges and derivatives offered
by car manufacturers.
Despite a decline in the number of manufacturers over
the last 10 years, model ranges and trim specifications
have grown significantly – with new derivative options
rising in their thousands year-on-year, a trend which
has diversified the options for consumers to the point of
This development has been mutually beneficial for
consumers and manufactures alike. It has given
consumers easier access to car choices that are more
closely based on their detailed requirements, but has also
enabled manufacturers to leverage the data that enables
them to create more targeted advertising, which is more
relevant for car buyers.
This has been empowered further within the online
research phase where manufacturers can meet car buyers
Used car average
The Auto Trader Retail Price Index tracks the market value of all used cars advertised by retailers on
Auto Trader, identifying the trends and changes driven by supply and demand dynamics across makes,
models, segments and fuel types.
Aug - Jan 2015
Average price change
Aug - Jan 2016
C LOWER MEDIUM
D UPPER MEDIUM
G SPECIALIST SPORTS
H DUAL PURPOSE
Fuel type could be less of a concern for today’s car
buyer, in light of the average price changes we’ve seen
with the three fuel types over the past six months.
been considered the more expensive fuel type option,
has dropped below petrol for the very first time – the
result of a steady price decline that could be due to
more diesel models entering the used car market,
following a spike in fleet leasing terminations (diesels
account for the majority of fleet cars).
Data from Auto Trader’s Retail Price Index has revealed
the average price of a diesel vehicle, which has long
Interestingly, the gradual decline in average diesel car
prices is mirrored by a decline in the percentage of
people searching for petrol or diesel specific models
on Auto Trader – which shows more consumers are
searching without specifying a fuel type option.
Auto Trader’s Retail Price Index: diesel vs. petrol
75% of consumers searched without selecting a
fuel type option in the last six months – the trend
suggests fuel type choice is becoming less important
for today’s consumer.
negative perceptions about buying and selling cars will be
alleviated – which can only be a good thing for consumers,
and car dealers alike.
It’s only when we compare the automotive industry to
other markets today, that we get a real sense of the speed
at which the world is changing – and how slow parts of the
automotive market has been to adapt.
The rise of mobile technologies have been a major catalyst
in the creation of the digital world – and when we look
at the huge dependence younger car buyers have on
this technology, combined with their online and research
behaviours – the pace at which the industry continues to
evolve will become a crucial factor of its success.
What our most recent research has taught us, is that when
it comes to identifying the pain points and uncomfortable
experiences for consumers within the car buying and
selling processes – the perception (in most cases) is far
worse than the reality.
This observation is not to suggest the industry hasn’t
reached some milestones in its digital revolution. And
when we analyse the trends in how consumers are
responding to these early changes – it’s breath-taking to
think what this 90 billion pound industry could achieve by
embracing full digital change.
So it’s important that the digital and traditional factions
of the industry work collaboratively to address these
misconceptions – with a common goal of improving
experiences for consumers.
Today’s consumers no longer have to endure complicated
processes, neither will they search to the point of
frustration if they’re not finding the right information.
Today’s car buyer will not be forced to do more work if
they’re not offered the tools to make life easier – because
they will simply move on to somewhere where they can – a
growing habit of the digital age.
Only time will tell how the automotive industry continues
to evolve – but with the pace at which the digital world is
moving every day, we hope to see some ground-breaking
developments in the near future that will enhance the way
consumers can buy and sell cars – redefining perceptions,
and further benefiting this hugely successful industry.
The sooner the automotive industry can adapt to the way
that consumer behaviours are changing, the sooner these
Operations Director, Auto Trader
About the Auto Trader
About Auto Trader
Auto Trader Group plc is the UK and Ireland’s largest
digital automotive marketplace. Auto Trader sits at the
heart of the UK’s vehicle buying process and its primary
activity is to help vehicle retailers compete effectively on
the marketplace in order to sell more vehicles, faster. Auto
Trader listed on the London Stock Exchange in March
2015 and is now a member of the FTSE 250 Index.
The marketplace brings together the largest and most
engaged consumer audience. Auto Trader has over
90% prompted brand awareness, and attracts on
average 43 million monthly cross platform visits (five
times larger than our nearest competitor), with circa
70% of visits coming through mobile devices. Over 80%
of all time spent on automotive classified sites is spent
on Auto Trader.
The marketplace also has the largest pool of vehicle
sellers (listing more than 420,000 cars each day).
Over 80% of UK automotive retailers advertise on
autotrader.co.uk and around 65% of UK used car
transactions involve cars listed on the site.
Auto Trader’s market-leading position enables it to
generate and collect large amounts of data from the
UK’s largest marketplace and leverage it to create a
suite of services, known as the four ‘Pillars’, that allow
and concerns throughout the car buying/selling journey,
budget and personal finances, perceptions about
buying/selling options and the outcomes of the varied
In the same month, Auto Trader also surveyed an
additional 2,000 UK motorists* specifically on the stages
of buying and selling where they feel most confident,
also enquiring about uncomfortable car buying/selling
experiences and how these have impacted their
decisions and behaviour.
*Motorists are defined in this instance as driving licence holders
age 17 years or more.
Auto Trader Retail Price Index
The Auto Trader Retail Price Index tracks the market
value of all used cars advertised by retailers on
Auto Trader. Tracking the trends and changes driven by
supply and demand dynamics across makes, models,
segments and fuel types – the Auto Trader Retail
Price Index offers detailed insight into any significant
movements in used car prices and overall market shares.
Other data from Auto Trader
As the UK’s largest online new and used car marketplace,
Auto Trader has leveraged its mass data to give insight
on the following:
BUY the right vehicles, at the right price
MARKET brands and businesses effectively in the
SELL more vehicles through advertising on the UK’s
largest digital automotive marketplace
MANAGE stock turn and vehicle margin
For more information please visit
In January 2016, Auto Trader surveyed 3,000 UK
motorists on their experiences with buying and selling
cars over a six month period (August 2015 – January
2016). The survey also enquired about considerations
Most viewed car adverts listed on Auto Trader
(August 2015 – January 2016)
Most searched fuel types on Auto Trader
(August 2015 – January 2016)
For all media enquiries, please contact the Auto Trader
Head of communications
0203 747 7038