With restrictions easing in April and car showrooms opening again, the used car industry collectively had a real spring in its step last month.
Used car prices have surged and we have seen stock sales rocket as a huge number of the 3,000 dealers on Motorway have rushed to pick up quality cars, fresh to sell on to motorists.
The used car market feels more buoyant than ever – a lot of cars have been selling above CAP and this is a real reflection of the current used car market.
Stock is limited and everyone wants to get as much as they can of it to meet the relentless customer demand that has built up over the third lockdown.
While we expect things to normalise soon, we are living in unprecedented times, so the duration of this pent-up demand for used cars remains unknown.
The flip side is that we have also had some cars selling for way under CAP in the last month, especially in the hugely popular sub-£5k tier.
However, last week we sold a Ferrari in the £75-100k tier for almost £5k under the reserve price, although it still went for a solid £85k.
This month, we wanted to share what some of the dealers on our platform have been feeling since coming out of the third lockdown.
How did April fare for their business? How did coming out of the third lockdown compare with the easing of restrictions last summer? And how did they use these past few months during lockdown to set up for showrooms reopening in April?
Here’s what they had to say…
Jono O’Byrne, general manager at Marshall Volkswagen, Milton Keynes, said: ‘It’s been great to have the doors open and welcome customers back.
‘We have seen an increase in the order take, stemming from the pent-up demand that has been out there.’
George Arnold, director at My New Motor, also saw a big uptick in sales last month.
‘The first few days started off slower than expected. Since then, we’ve seen unprecedented levels of walk-ins and people wanting test drives.
‘This month consequently has turned out to be a record month for us and May is set for a similar level of sales.’
However, Rybrook in Wolverhampton noted that while footfall was naturally up, sales didn’t dramatically increase in April, as its level of completed online sales had remained at a similar level to the end of 2020 when doors were still open.
Sales manager Dan Francis said: ‘The weeks since opening up our doors have naturally seen an increased footfall from the general public wanting to simply browse the options available to them.
‘But it also allowed the customers who made inquiries during the ‘‘online-only’’ period to come in and test-drive the cars of their choice.
‘Amazingly, here in Wolverhampton sales haven’t dramatically increased, but the level of sales concluded during ‘‘online only’’ remained at a constant and similar to that before the end of 2020 when doors were open.
‘Sales executives are naturally spending longer with each customer from viewing to handover, which of course impacts on time available for new and existing leads coming into the business remotely.’
Dan Crewe at Zoom Automotive said they had also been consistently busy throughout lockdown and that fewer window-shoppers actually made things easier for them.
‘We embraced technology and spent hours talking to our customers on the phone. As a result, our sales remained strong.
‘If I’m honest, I think things were easier. We had buyers who knew what they wanted, they read our reviews and were confident to buy. Deliveries or click-and-collect were arranged.
‘It seemed easier than lining up appointments for customers who were “just browsing”’.
Lockdown 3 vs Lockdowns 1 & 2
We also asked our dealers how coming out of lockdown in April fared in comparison with when we came out of lockdown last summer.
From increased footfall to being better prepared in terms of stock levels and social distancing, they all agreed that it’s been a smoother process this time around.
O’Byrne said: ‘It’s been fairly similar. We have seen an increase in order take and inquiry.
‘However, we were a lot more prepared for what to expect this time around following our learnings from Lockdown 1.
‘Last year, this new way of trading was new to both us and our customers. This lockdown, it’s been a really smooth reopening and we were delighted to have customers back in our showrooms, albeit socially distanced and safely of course!’
Arnold said: ‘The benefit this time is we knew what to expect so had restocked beforehand, not only to meet the expected demand but as it was also inevitable book prices would rise.’
Francis agreed, saying: ‘Coming out of lockdown this time around has been less manic and hasn’t taken us as much by surprise as it did last year.
‘But of course many lessons were learnt from the pent-up demand in 2020, and we were fully prepared with a 100 per cent complement of staff all on hand to deal with the online and then walk-in inquiries once the doors swung back open!’
Preparing to reopen
When we asked our dealers how they had used the past few months during lockdown to set up for showrooms reopening, health and safety was obviously the number one priority.
O’Byrne said: ‘Marshall have ensured all the showrooms are completely Covid-compliant and safe, with a number of precautions taken such as sanitation stations, reduced vehicle numbers in the showroom, plus key and vehicle sanitisation to name a few.
‘Customer feedback has been really positive, with many commenting they feel safe in the environment, which is great to hear.’
My New Motor also invested in further online tools to make the customer experience more efficient and even safer.
Arnold said: ‘We’ve invested in further improving our offices to be Covid-secure for reopening, along with moving all our customer paperwork over to e-sign.’
Across the board, it is clear that car dealerships across the country conveyed a real sense of resilience during the third lockdown, supporting their staff and maintaining high levels of customer service even when their physical doors were shut.
Francis said: ‘It was very much classed as ‘‘business as usual’’ here once the announcement was made back in December that we were heading for a third lockdown.
‘That mentality remained throughout the team, ensuring the three months with closed doors were made as successful as possible, and I firmly believe that the customers on the whole still enjoyed the experience.’
As restrictions continue to ease over the next couple of months, people will move around with more freedom – travelling further afield and adjusting back to a more normal way of life.
With showrooms open, safer and more efficient than ever, and with a constant flow of quality stock on their forecourts, it is looking increasingly likely that the used car market will continue to boom over the summer months and beyond.
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