Car Dealer has witnessed first hand the crazy used car prices, huge numbers of registered bidders and battle among buyers in an online car auction.
Snows Motor Group COO Neil McCue invited Car Dealer along to its BMW Portsmouth showroom to sit and watch one of their weekly online sales.
Joined by group used car disposal manager Kevin Arlott, we watched the 57-car sale achieve a 92 per cent conversion rate with some cars making thousands over their reserve prices and far exceeding Cap clean prices.
The motor trade is currently fighting for used cars as demand from buyers is outstripping supply and in our exclusive video, which you can watch above, you can see what happened.
‘It’s crazy at the moment,’ said McCue.
‘Some cars are going for far over the reserve prices. Cash flow is vital to us so this is a great way to convert our cars into cash quickly.
‘I’ve never seen the market like it.’
Auctions have changed dramatically since the lockdown with most remaining online.
The Snows sale has been held with BCA every Wednesday for more than 15 years, but now is exclusively online.
Static images of the cars are displayed with the auctioneer quickly firing through the cars at a rate of one a minute.
Overall bidding for the cars was frenzied with the sale starting with 254 bidders online and rising to 291 at one point – before lockdown, Snows say they would have been lucky to attract 50.
At Snows BMW, Arlott has a direct line into the auctioneer and his assistant and carefully monitors the prices of the used cars as they go through.
He can change the bidding increments to eke out a few more pounds for each car live during the sale and amend reserve prices to ensure they sell.
‘I’ve been working in the motor trade since 1986 and right now the used car market is very tough,’ said Arlott.
‘That’s because it might be easy to sell the cars because demand is so high, but when I have my other hat on and need to buy them it’s very difficult to get them at the right price.’
During the sale we witness an Audi A4 sell for £2,000 over Cap Clean, a 2005 BMW 3 Series bought for £100 make more than £1,000 and countless others sell for well over their guide prices.
The cars in the sale are models that are either too old for Snows to sell on its sites or the wrong brands and all generally sell for well over the guide prices.
Craig Lacey, sales manager for BMW Portsmouth, added: ‘The good thing is a strong used car market makes doing a deal a little easier as we can give a little bit more for part exchanges knowing they will do well at auction.’
Only three cars in the sale fail to sell – a Peugeot 2008 with a question over its history was one and, surprisingly, a 2009 model Toyota Prius was the other.
‘Before the lockdown Prius would always make good money and sell to taxi drivers but not any more,’ said Arlott.
He thinks the lack of custom for taxi drivers means there are less taxi drivers looking to renew their cars or get into the trade.
Snows chief McCue doesn’t think the market will change any time soon either.
He predicts that the summer will continue to be strong for used car sales with new picking up as the manufacturer deals increase.
‘We used to struggle in the summer then have a bumper September,’ he said. ‘That will change this year and I think it will continue to be steady. I hope it does.’
BCA say that demand for used cars is ahead of usual for this time of year and it has expanded its sales to cope.
Used values at the auction house continued to rise in June, averaging £8,565 over the month, an improvement of £1,029 (14 per cent) compared to May.
BCA‘s Stuart Pearson added: ‘The momentum at BCA continues and we have expanded our online remarketing programme significantly to meet the demand.
‘BCA are running up to 20 sales in parallel at any one time with auctioneers and clerks, vendor representatives and buyers operating remotely.
‘Daily entries are regularly exceeding 5,000 vehicles and demand across most sectors is ahead of what we would typically see at this time of year.’
It seems the crazy used car market isn’t going to change any time soon…
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