When Looking For A New Car, Consider An Old One

Many car buyers select a new car because it is more reliable than a used one. Assuming that all new vehicles are more reliable than older models is a mistake.

A recent study by insurance company Warranty Direct revealed some very surprising details regarding the reliability and repair charges for new versus used vehicles.

Results of the research indicated that older autos are less expensive to repair and less likely to break down in the first place. An older vehicle has ten percent less chance of breaking down than a more technologically advanced newer model.

People should consider this before securing car finance for a new automobile. Choosing a used model may be a better bet over the long-term.

Older models of the Audi A4, Ford Fiesta, Vauxhall Zafira, and those in the BMW 3-series are particularly appealing. Warranty Direct reported that the average repair charge for a 1995 to 2002 Ford Fiesta was half of that for models built from 2002 to 2008. Nearly half of all new Zafiras have electrical issues, twice the number of older models experiencing this issue.

While only ten percent of Audi A4s produced from 2000 to 2005 experience engine issues, 33 percent of those built from 2005 to 2009 have these problems.

One of the scariest statistics revealed by the study pertains to the BMW 3-series. A recent model is three times more likely to have a braking system issue than a model produced in earlier years.

This information indicates that while purchasing a new car might be the most appealing option, it is not always a cost-effective choice.

Shopping for a reliable used vehicle and comparing car loans to find the lowest interest rate may save money. Many used cars still have years of use remaining and have lower repair costs during the ownership period. Lopid

Exponential Growth Predicted For UK B2B Used Car Sales Online

Online UK remarketing company Autorola is predicting a 100 percent increase for online business to business (B2B)car sales during the next five years. Currently, only about 15 percent of B2B sales involving used cars are done online. By 2016, this figure will jump to nearly 30 percent, says Autorola. Despite this, offline auctions will still be a viable way for businesses to purchase used vehicles.

Spokespeople for the remarketing company believe that almost all offline auctioneers will develop an online presence in the coming years. Over time, the percentage of online sales will increase in relation to transactions conducted offline. Peter Groftehauge, Autorola CEO, stated that there will be some physical auction network realignment, but this will be related to decreased numbers of used cars returning to market.

To continue to be viable, auctioneers require volume. This explains why several large sites have recently been mothballed. Online growth will be fueled by the remaining sites and an increasing number of online B2B used car providers, said Mr. Groftehauge. More business consumers will be securing car finance for vehicles purchased online rather than those bought through a physical auction.

Many car supermarkets, independent traders, and dealer groups have been forced to decrease staff levels due to the economy, according to the Autorola CEO. Online auctions are an easy way for staff to bid on automobiles across several channels in one day, without the need to leave their office. The convenience and efficiency aspects alone should have positive effects on the industry.

Autorola predicts that over 220,000 vehicles will be sold through its online platforms this year. With only two weeks remaining in 2011, this goal seems within reach. Continued growth in the online B2B used car sales market during the next several years provides car finance providers with substantial opportunities as well as a few challenges.

OFT Receives Large Number Of Used Car Complaints

Consumer Direct is the consumer arm of the UK Office of Fair Trading. Between January and the end of September, the division received over 56,000 complaints regarding UK used automobiles. This is the largest number of official complaints that any trader has received so far this year. Car buyers should take extra precautions before signing on the dotted line.

From January to late September of this year, Consumer Direct received slightly more than 36,200 complaints regarding furniture and nearly 35,000 telecommunications complaints. Approximately 48,000 complaints were received regarding home improvement and maintenance. Each of these is far less than the 56,000 complaints lodged regarding used car dealers.

Approximately 70 percent of the used car complaints pertained to faults with the vehicles themselves. Over 13 percent dealt with omissions or misleading claims made by the seller. Close to seven percent of consumers complained that the seller offered substandard services. According to OFT research results published in 2010, a car buyer was saddled with £425, on average, to correct unresolved vehicle issues considered the obligation of the dealer.

According to Consumer Direct spokesperson Michele Shambrook, the entity receives numerous complaints regarding traders who refuse to provide the appropriate level of compensation or even deal with legitimate vehicle issues. She warned that dealers selling defective cars or treating customers unfairly could be subject to enforcement action. The OFT recommends that used car buyers ask certain questions before agreeing to car finance or cash payment.

Consumers should view the video from OFT regarding their rights when purchasing a used vehicle. One of these rights is to inquire what mileage, history, or mechanical checks have been performed. Just last week, the OFT took action against Carcraft car supermarket group for failure to conduct pre-sale auto inspections, refusing to replace or repair faulty cars, and lack of clear explanation regarding car finance policies.

Improvement Seen In UK Used Car Market

Confidence seems to be returning to the UK used car sector. Data recently released by carfinance247.co.uk shows that spending from January through June of 2011 exceeds that of the same period during both 2009 and 2010.

This information was based on used car finance applications and used vehicle sales.

A bit more than £1.4 million was spent by consumers from January to June 2009. This included the vehicle deposit and regular or bad credit car finance amount. Deposits averaged £220.20 and the average value of used cars purchased during this time was £8,299.

During the same period in 2010, UK consumers spent £1.3 million on used car purchases. Vehicle value averaged £6,879 and the average deposit increased substantially to £504.70.

Between January and June 2011, used car buyers in the UK spent nearly £1.8 million to purchase their vehicles. The average deposit once again increased, reaching £727.91, and the average value for the used vehicles was £8,853.

Carfinance247.co.uk Director Louis Rix noted the increase in used car spending in 2011 as well as the tripling of the average deposit since 2009.

Mr. Rix said his company’s prediction that the used car sector would improve over the short-term appears to be accurate. As consumers become more confident in the economy, they seem to have more funds to apply toward a used car deposit.

He believes that consumers feel more comfortable using car finance for a pricier car than they did during the same period last year.

Though these statistics are encouraging, the car market has a long way to go. Many consumers are shying away from purchases due to the increasing price of fuel. Some are even going in the opposite direction, selling their cars and carpooling or taking public transportation.

Whether the positive used car trend will continue remains to be seen.