2022
9
UK Car Purchasing Process Market Report 2022
2022-03-17T03:03:57+00:00
OX1100831
2195
148925
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Report
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“After a difficult period for sales during the pandemic, there is evidence that demand for cars is beginning to recover. Driven by used sales, Mintel expects car purchasing to begin…

UK Car Purchasing Process Market Report 2022

£ 2,195 (Excl.Tax)

Report Summary

The UK Car Purchasing Process report identifies consumer attitudes towards inflationary pressures, key drives, and fuel categories in the UK. This market report covers the market size, market forecast, market segmentation and industry trends for the Car Purchasing Process market in the UK.

Current Market Landscape

One of the most surprising statistics of this Report is the lack of penetration of AFVs (Alternative Fuelled Cars) in the used car sector. Such a low figure suggests that few new AFVs have yet to make it into the used market, no doubt forcing many potential buyers here to continue with either a petrol or diesel vehicle. Going forward, with the recent strong demand for new AFVs, this situation is likely to change rapidly over the coming five years.

  • Those having purchased online doubled from 3% to 6% between November 2020 and November 2021.
  • 69% of over-65s would use main dealers, compared to only 31% of purchasers aged 17-24.
  • 29% of households say they will definitely purchase a car in the coming three years.

Rising prices have been a feature of the car market as the country began to emerge from the worst of the pandemic towards the end of 2020. Supply constraints resulted in production disruption for a number of manufacturers resulting in shortages for new cars. Buyers increasingly moved towards vehicles available in the used sector with this heightened interest having the effect of inflating prices. With price inflation in the wider economy placing pressure on consumer spending priorities, cars have become comparatively more expensive compared to other products and services, threatening the recovery that is taking place in demand.

Future Market Trends in Car Purchasing Process

Pressures faced by car owners are a major threat to future purchasing intentions. Most obviously the period since 2021 has seen the rising price of fuel impact on the cost of owning a car. As global economies began to recover during 2021, supply of diesel and petrol has failed to compete with demand thereby forcing up prices charged. Yet it is not only direct costs that are a threat. Non-price factors such as the spread, and planned introduction, of restrictions on car use in major cities are an expanding challenge and one that will continue to evolve.

With sizeable online investment taking place during 2021, this remains the channel to watch in terms of how it will disrupt the market. Specialist online retailers and manufacturers/dealers both seeing their popularity amongst car owners doubling. Looking forward, while the appeal of online for younger purchasers is likely to remain attractive, a fightback by traditional retailers shouldn’t be underestimated.

Read on to discover more details or take a look at all of our UK Automotive market research

Quickly understand

  • The impact of COVID-19, inflationary pressures and supply chain issues on UK car purchasing.
  • Recent developments in sales by new/used, vehicle type and fuel categories.
  • Key drivers impacting on purchasing in the UK market.
  • The main channels used for purchasing.
  • Where last car was purchased, future consumer purchase intentions, preferences by new/used, fuel type as well as the importance of specific factors when purchasing an electric car.

Covered in this report

Brands: Toyota, MG, Kia, Audi, Hyundai, Volvo, Volkswagen, Peugeot, Nissan, Skoda, MINI, Land Rover, BMW, Honda, SEAT, Citroën, Renault, Vauxhall, Mercedes-Benx, Ford.

Expert analysis from a specialist in the field

This report, written by Utku Tansel, a leading analyst in the Retail sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

After a difficult period for sales during the pandemic, there is evidence that demand for cars is beginning to recover. Driven by used sales, Mintel expects car purchasing to begin to return to pre-pandemic levels during 2022. Yet, looking forward consumers remain affected by external pressures. Rising costs are the most notable with these, and others, having the potential to restrain demand.

Neil Mason
Retail Category Director

Table of Contents

  1. Overview

      • Key issues covered in this Report
        • COVID-19: market context
          • Economic and other assumptions
            • Products covered in this Report
            • Executive Summary

                • Impact of COVID-19 on the car market
                  • Figure 1: Short-, medium- and long-term impact of COVID-19 on the car purchasing market, 2022-27
                • The market
                  • Market size and forecast
                    • Figure 2: UK new and used car sales, by volume, 2016-26
                  • Used cars increasingly dominate purchases as new sector is hit by difficulties
                    • Figure 3: New and used car market volumes (United Kingdom), million units, 2016-21
                  • Rising demand for AFVs sees them replace diesel as the second choice after petrol
                    • Figure 4: Sales of new cars, by fuel type, 2016-21
                  • Franchised dealers suffer from buoyant used sales and growth of online
                    • Figure 5: Percentage point change in share of sales, by channel, 2017-21
                  • Buoyant consumer confidence has the potential to boost recovery for the market
                    • Figure 6: Household financial wellbeing index, 2018-21
                  • Companies and brands
                    • Ford suffers most during 2021 as share of new sales plummets
                      • Figure 7: Share of new car registrations, percentage point change (top 20 marques), 2019-21
                    • Advertising expenditure boosted during 2021 by online retailers
                      • Figure 8: Recorded above-the-line, online display and direct mail total advertising expenditure by UK car retailers, 2017-21
                    • OEMs and dealers are adjusting to how consumers wish to purchase
                      • The consumer
                        • Income is a major factor in car ownership
                          • Figure 9: Car ownership, 2021
                        • Falling new car sales boost profile of used sector
                          • Figure 10: Age of car owned, 2021 versus 2017
                        • Opportunities for car ownership exist amongst older men and more affluent adults
                          • Figure 11: Other access to cars, 2021
                        • Main dealers are favoured by older adults
                          • Figure 12: Where last car was purchased, 2021
                        • Growing confidence boosts profile of those definitely planning to purchase
                          • Figure 13: Intention of purchasing a car/s in the next three years, 2021 versus 2020
                        • Demand for vehicles is expected to be especially strong during 2022
                          • Figure 14: Timescale for purchasing a car in the next three years, 2021 versus 2020
                        • New cars are a key demand from wealthy buyers
                          • Figure 15: Likelihood of new or used purchase, 2021
                        • Alternative fuels continue to grow their market presence
                          • Figure 16: Preference for future fuel types, 2021 versus 2019
                        • Young families are more likely to be involved in the purchasing process
                          • Figure 17: Involvement of others in purchasing, 2021
                        • More focused communication is needed amongst women to raise their interest in battery-electric cars
                          • Figure 18: Important factors when purchasing an electric car, 2021
                        • Families are likely to be attracted to electric cars by fuel price rises
                          • Figure 19: Impact of increasing fuel prices on purchasing an electric car, 2021
                      • Issues and Insights

                        • What next for new car sales?
                          • Online set to face increased competition from OEM and dealers
                            • Potential for EV sales set to remain constrained by limitations
                            • Market Size and Performance

                              • Pandemic impacted both new and used sectors of the market
                                • Figure 20: Short-, medium- and long-term impact of COVID-19 on the car purchasing market, 2022-27
                              • Sales fall 20.9% in 2020 further worsening recent difficulties for the car market
                                • Figure 21: New and used car registrations (United Kingdom), by volume, 2016-21
                            • Market Forecast

                              • Car purchases are forecast to recover in the short term
                                • Figure 22: UK new and used car sales, by volume, 2016-26
                              • Market drivers and assumptions
                                • Figure 23: Key drivers affecting Mintel’s market forecast, 2016-26
                              • Forecast methodology
                              • Market Segmentation

                                • Used cars preferred by buyers as market softens
                                  • Figure 24: New and used car market volumes (United Kingdom), million units, 2016-21
                                • Recovery for new car sales is being driven by private purchases
                                  • Figure 25: UK new registrations of cars, 2016-21
                                • New car demand is buoyant outside of London and the South East
                                  • Figure 26: New car registrations, by region, United Kingdom, 2016-20
                                • Demand for SUVs stimulates profile of dual-purpose and MPV category
                                  • Figure 27: New car registrations, by category, 2016 and 2021
                                • Dual-purpose cars build share between 2019 and 2021…
                                  • Figure 28: New car registrations, by category (volume share), 2021 versus 2019
                                • …and remain a clear favourite with private buyers
                                  • Figure 29: New car registrations, private buyers, by category (volume), 2016 and 2021
                                • New car buyers are increasingly purchasing AFVs…
                                  • Figure 30: Sales of new cars, by fuel type, 2016-21
                                • …with battery-electric vehicle demand especially strong
                                  • Figure 31: Sales of new AFV * cars by type, 2017-21
                                • Lack of used AFV stock dents their profile amongst used buyers
                                  • Figure 32: Sales of new and used cars, by fuel type, share of volume, 2021
                              • Channels to Market

                                • Franchised sector hardest hit from slowdown in car sales
                                  • Pandemic lifts the profile of online purchasing
                                    • Figure 33: Sales of cars, by channel, 2017-21
                                  • Franchised dealer sales fall over a third between 2017 and 2021
                                    • Figure 34: Sales of new cars (million units), by channel, 2017 and 2021
                                  • Independent dealers performing the best in the used sector
                                    • Figure 35: Sales of used cars (million units), by channel, 2017 and 2021
                                  • Pandemic accelerates consolidation of sales outlets
                                    • Figure 36: Number of UK franchised dealer outlets, 2017-21
                                  • Traditional market leaders are suffering most from a changing market
                                    • Figure 37: Change in number of sales points, top 10 brand site portfolio as of 2021, 2019-21
                                • Market Drivers

                                  • GDP should reach pre-pandemic levels by the end of Q1 2022…
                                    • …but the post-COVID bounce-back will be short term
                                      • Inflationary pressures are mounting
                                        • Consumers’ financial wellbeing has slipped from its recent high point…
                                          • Figure 38: Household financial wellbeing index, 2018-21
                                        • …and concerns over inflation are coming to the fore
                                          • Figure 39: Consumer concerns about household finances, October-December 2021
                                        • Disruption of car production as a result of the pandemic
                                          • Fuel prices up as global economies reopen
                                            • Figure 40: Unleaded and diesel pump prices, January 2020-December 2021
                                          • Average premium plummets 6.7% in 2021
                                            • Figure 41: Average premium for comprehensive car insurance policies, 2016-21
                                          • Closure of dealerships impacts lending in 2020
                                            • Figure 42: Value of advances (£m) on sales of all cars bought on finance by consumers at point of sale, 2016-21
                                          • Cars are preferred over public transport as the pandemic hits
                                            • Figure 43: Miles and trips per year, car and public transport, 2019 and 2020
                                          • Pandemic worries also stunt taxi and car hire markets…
                                            • Figure 44: Total licensed taxi and private hire vehicles (England and Wales), 2017-21
                                          • …although demand for car clubs appears unaffected
                                            • Figure 45: Car club vehicle and membership growth, 2016-21
                                          • P2P car sharing remains a long-term threat to car ownership
                                          • Market Share

                                            • Supply and other issues impact some manufacturers
                                              • Ford hit worst by slump in share of sales
                                                • Figure 46: Manufacturer share of sales (top 10 manufacturers as of 2021), 2019 and 2021
                                              • Manufacturers with a strong hybrid and electric line-up perform better with buyers
                                                • Figure 47: Manufacturer shares of new car registrations, 2015-21
                                              • Superminis maintain lead as Tesla’s Model 3 challenges market leaders
                                                • Figure 48: Top 10 new car models, 2018-21
                                              • Legacy brands continue to prove popular in the used car market
                                                • Figure 49: Top 10 used car models, 2018-21
                                            • Competitive Strategies

                                              • Blending traditional retail with online
                                                • Carzam looking to disrupt the disruptors
                                                  • Online partnership to benefit the leasing market
                                                    • Great Wall Motors looks to enter the market for a second time
                                                      • Agency approach for some manufacturers
                                                        • Rebranding to address a changing market
                                                          • Dealership expansion still preferred by tier two players
                                                          • Advertising and Marketing Activity

                                                            • Online retailers drive forward investment
                                                              • Figure 50: Recorded above-the-line, online display and direct mail total advertising expenditure by UK car retailers, 2017-21
                                                            • 2021 sees stronger spring investment compared with 2020
                                                              • Figure 51: Recorded above-the-line, online display and direct mail total advertising expenditure by UK car retailers, monthly share of annual expenditure, 2020 and 2021
                                                            • Arnold Clark and Bristol Street challenge online with increased expenditure
                                                              • Figure 52: Leading 10 UK car retailers: Recorded above-the-line, online display and direct mail total advertising expenditure, 2017-21
                                                            • TV benefits most from increased investment
                                                              • Figure 53: Percentage media type split of recorded above-the-line, online display and direct mail total advertising expenditure by car dealers, 2019 and 2021
                                                            • Nielsen Ad Intel coverage
                                                            • Car Ownership

                                                              • 72% of adults are car owners
                                                                • Figure 54: Car ownership, 2021
                                                              • Greatest disparities in car ownership are evident by income
                                                                • Car ownership falls back during 2021
                                                                  • Figure 55: Car ownership, 2017-21
                                                              • Age of Car Owned

                                                                • Pre-pandemic purchases dominate the market
                                                                  • Figure 56: Age of car owned, 2021
                                                                • Older adults remain a challenge for sellers
                                                                  • Men favour owning a car purchased from new
                                                                    • London – a key market for recent purchases
                                                                      • Wealth is a key factor influencing purchasing
                                                                        • Slowdown in sales boosts profile of those owning older cars
                                                                          • Figure 57: Age of car owned, 2017-21
                                                                      • Other Access to Cars

                                                                        • Most non-car owners don’t have a driving licence
                                                                          • Figure 58: Other access to cars, 2021
                                                                        • Adults aged 25-44 most likely to not hold a driving licence
                                                                          • Income is another factor impacting on holding a driving licence
                                                                            • Older men and wealthy adults offer opportunities
                                                                            • Where Last Car Was Purchased

                                                                              • Main dealers are well placed with car buyers
                                                                                • Figure 59: Where last car was purchased, 2021
                                                                              • Main dealers are favoured by older adults
                                                                                • Young buyers seek out value
                                                                                  • Potential for online to develop further
                                                                                    • Main dealers are strongly placed with new car owners
                                                                                      • Online starts to make inroads into traditional channels
                                                                                        • Figure 60: Where last car was purchased, 2017-21
                                                                                    • Car Purchasing Intentions

                                                                                      • Over half plan to purchase a car in the next three years
                                                                                        • Figure 61: Intention to purchase a car in the next three years, 2021
                                                                                      • Wealth has a major impact on the likelihood of purchasing
                                                                                        • Families are also an important market
                                                                                          • New ways of working with those in urban areas could offer an opportunity to stand out
                                                                                            • New car owners present best prospects as future buyers
                                                                                              • Growing consumer confidence boosts those who definitely plan to purchase a car
                                                                                                • Figure 62: Intention of purchasing a car/s in the next three years, 2017-21
                                                                                              • Over half of purchases will be made in the coming 12 months
                                                                                                • Figure 63: Timescale for purchasing a car in the next three years, 2021
                                                                                              • Young men and wealthy are best short-term prospects
                                                                                                • Older adults are less confident about purchasing
                                                                                                  • Short-term sales are likely to come from new car owners
                                                                                                    • Boost evident for those planning to buy in the coming six months
                                                                                                      • Figure 64: Timescale for purchasing a car in the next three years, 2017-21
                                                                                                    • Strong intentions for buying new should help future growth
                                                                                                      • Figure 65: Likelihood of new or used purchase, 2021
                                                                                                    • New cars are a key demand from wealthy buyers…
                                                                                                      • …with men also expected to dominate new car sales
                                                                                                        • Young women more likely to buy used
                                                                                                          • Addressing those who are uncertain about buying new or used shouldn’t be overlooked
                                                                                                            • 2022 is looking good for new car purchases
                                                                                                              • New car purchasing intentions have still to fully recover
                                                                                                                • Figure 66: Intention of purchasing a car/s in the next three years, 2017-21
                                                                                                            • Preference for Fuel Types

                                                                                                              • Hybrid overtakes petrol amongst potential purchasers
                                                                                                                • Figure 67: Preference for future fuel types, 2021
                                                                                                              • Young men are a useful target market for manufacturers of AFVs…
                                                                                                                • …despite many wedded towards diesel as a fuel
                                                                                                                  • Rural buyers remain uncommitted towards fuels
                                                                                                                    • Alternative fuelled cars popular choices for new car owners
                                                                                                                      • Pandemic fails to dent interest amongst buyers in innovation
                                                                                                                        • Figure 68: Preference for future fuel types, 2019 and 2021
                                                                                                                    • Involvement of Others in Purchasing

                                                                                                                      • Car buying is often about the driver
                                                                                                                        • Figure 69: Involvement of others in purchasing, 2021
                                                                                                                      • Older men want full control
                                                                                                                        • Benefit from the role of others with younger buyers
                                                                                                                          • Offering a warm welcome to families
                                                                                                                          • Purchasing an Electric Car

                                                                                                                            • More focused communication is needed amongst women to raise their interest in battery-electric cars
                                                                                                                              • Figure 70: Purchasing an electric car, 2021
                                                                                                                            • Demands from older purchasers suggest a younger focus for sales teams
                                                                                                                              • Practicalities of ownership amongst women hint that advice is needed
                                                                                                                                • Low concerns towards purchase price by city dwellers offer opportunity as early adopters
                                                                                                                                  • Broadening model range is essential to exploit wealthy buyers
                                                                                                                                  • Impact of Fuel Price Rises on Buying Electric Cars

                                                                                                                                    • Families are likely to be attracted to electric cars by fuel price rises
                                                                                                                                      • Figure 71: Purchasing an electric car, 2021
                                                                                                                                    • Family concerns make them a promising market for electric car ownership
                                                                                                                                    • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                      • Data sources
                                                                                                                                        • Exclusions
                                                                                                                                          • Market sizing and segment performance
                                                                                                                                            • Abbreviations
                                                                                                                                              • Consumer research methodology
                                                                                                                                              • Appendix – Forecast Methodology

                                                                                                                                                • Market forecast and prediction intervals
                                                                                                                                                  • Figure 72: Market forecast and prediction intervals for cars (million units), 2021-26
                                                                                                                                                • Market drivers and assumptions
                                                                                                                                                  • Figure 73: Key drivers affecting Mintel’s market forecast, 2020-26
                                                                                                                                                • Forecast methodology

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