Vehicle history and data expert Cartell.ie reports the buyer of a new private vehicle in Ireland is now purchasing spending more than €30,000 on average, for the first time since Cartell started recording these statistics.
Cartell calculated the total value of new vehicles purchased in Ireland between the years 2006 and 2018 based on the recommended open market selling price (OMSP ) for each vehicle. The company divided the total value for each year by the number of new vehicles sold that year to establish the average value per buyer.
Unsurprisingly, it also found the average value of a new vehicle purchased fluctuated with the fortunes of the economy, so, in 2007 at the height of the boom the average value of a vehicle purchased was €28,106 which dropped to €24,758 in 2011 before increasing steadily every year since then as the economy improved. In 2016 the average value of a new vehicle was already back to boom time levels, recording €28,385, while in 2017 the value had ticked up four per cent to €29,481.
For the first six months of 2018 the average value has hit €30,000, returning a figure of €30,130: the first six months of 2017 recorded €29,391 before ending the year on €29,481. This shows the average Irish buyer is now buying a vehicle worth €30,000 for the first time since Cartell started recording these statistics.
Why has the average value been increasing? Cartell.ie says it has considered several possible reasons for the increase in the average value of a private vehicle purchased in Ireland over the last several years.
- Consumers may be opting for more expensive vehicles, or more expensive vehicle types like SUVs and crossover vehicles, or MPV
- Buyers have more cash to spend or more available lines of credit. Financial products, such as personal contract plans (PCPs ) came to prominence in Ireland during the recession as manufacturers sought a means to provide direct lines of credit to potential buyer
- Buyers may want larger cars. The country had a recorded population of 4.23 million in census 2006 which increased to 4.76 million in census 2016. This increase may have affected buyer decisions, for instance, buyers with younger children may need additional space
- Vehicles are more expensive to manufacture. To comply with NCAP safety ratings, for example, this increases the cost of manufacture. The consumer now often expects certain higher specification items as standard too – larger wheels, alloys, on-board technology, advanced driver assistance systems (ADAS ) features, which all increase the manufacture cost
- Increased consumer demand for hybrid vehicles (where technology is more expensive to implement ) could be making an impact, along with changes in buyer habits to more environmentally friendly vehicles, and guided generally by the move to city-clean air policies.
- Vehicles in the current generation often weigh more than previous generations to accommodate additional safety systems.
John Byrne, legal and public relations manager at Cartell.ie, says the buyer of a new vehicle is getting more features than ever before, more technology, and more safety.
“The buyer has also shown an appetite for other features which manufacturers are increasingly rolling out as standard, such as alloy wheels and electric windows. Combined, these features increase manufacturing costs and push average values upwards,” he says.
“The buyer may also be opting for more expensive cars owing to more readily available lines of credit, or simply because buyers are keen to buy a larger car when fuel economy and motor taxation figures have dropped so significantly across the board.”
Buyers have different buying habits, he says. Some will enter the market with an open mind and opt for the best available deal within their budget, while others will be keen to opt for the same manufacturer or the same model.
“Remember this study is considering average values of new private vehicles based on the open market selling price. We are not looking at the price actually paid by the buyer - the actual deal struck between the buyer and the seller will vary widely to account for discounts, sales events, and trade-in values, for example.”