10:17 am, May 11, 2020
In the prime minister’s speech to the nation last night he told the country to go back to work if they can’t do it at home – and to avoid public transport.
Unless totally necessary the public should avoid trains and buses and instead use cars, bikes or walk to work.
Boris Johnson advised people to avoid public transport in his speech saying ‘if at all possible because we must and will maintain social distancing, and capacity will therefore be limited’.
And by actively encouraging the public to drive to work and avoid public transport, car dealers could well see a blip in demand.
Car Dealer Magazine reported on this in a detailed investigation which found just the fear of using public transport was likely lead to a demand for cars. Now, with the PM actively encouraging driving that demand could be even greater.
Jim Holder, editorial director of Haymarket Automotive, which publishes What Car? and Autocar magazines has already seen a rise in demand for used car reviews on its site.
He said: ‘For some weeks we’ve noticed increasing traffic on our websites around older models in our used car reviews, suggesting people are considering buying “stop-gap” cars to bide them through the crisis. This announcement will surely turn some of that research into sales.’
He’s not the only one who has seen a rise in demand.
Phill Jones from the eBay Motors Group told Car Dealer Magazine: ‘For those now returning to work, and those thinking about the eventual return to work, they have been actively told to not use public transport.
‘This will inevitably see people considering whether to buy a new car for their journey to work, though we must remember that traffic will continue to be light while restrictions stay in place. People will also be weighing up if this is a long or short-term change.’
Jones said the group had seen a spike in searches for motorbikes and scooters too with leads to sellers of those on Gumtree doubling.
He added: ‘We believe this is partly linked to an increase in delivery service, but will inevitably include people thinking about alternative transport options.
‘With used car leads also recovering, it highlights that there are consumers out there who want to have an active and informed conversation with dealers.’
Car Dealer reported last week news from the group that 75 per cent of buyers looking for a used car during the lockdown were planning on buying within three months of the restrictions lifting.
[Key soundbites from Boris’ speech, 5:29 video]
Car dealers will need to be able to offer remote sales via their website and deliveries to customers homes until further guidance is given by the government, especially as many are still worried about whether they can open or not.
Used car dealer Umesh Samani, of Specialist Cars in Stoke, is chairman of the Independent Motor Dealers Association. He isn’t so sure we’ll see a spike in sales off the back of the PM’s direction.
He told Car Dealer: ‘He has definitely made people more aware to avoid public transport, but I don’t feel it will make people rush out to buy cars instantly as there are lots of other things to consider on top of the car purchase – insurance, road tax, running costs etc.
‘As much as people worry about health risks they also think a lot about the costs in the overall picture.
‘My feeling has been that the surge of possible sales will come from maybe the £2,000-£5,000 range with small, economical, low tax, low insurance cars being popular.’
CAP HPI head of valuations Derren Martin agrees the spike could be at the cheaper end of the market.
He told us: ‘Encouraging consumers away from public transport will likely increase demand for used cars, particularly at the cheaper end of the market, for those who do not currently own a vehicle.
‘It will be interesting to see how this works around major cities like London, where parking is expensive and often not easily available.
‘Smaller cars will likely be in demand, particularly smaller automatics – we understand that some remarketers are already looking to charge a premium for these as demand is likely to be strong.’
Steve Fowler, editor in chief of Auto Express, told us he thinks it’s inevitable people will avoid public transport – whether they’re directed to or not.
He said: ‘I’m not sure Boris had to advise people to avoid public transport – it’ll happen wherever possible, anyway.
‘Sadly it’s not always possible, but I know car makers are monitoring the situation very closely and we could be moving into an era where personal, sustainable, affordable transport solutions become very popular.
‘Cars like the Citroen Ami – available in France for €2641 down and then €19.99 per month – can’t come too soon.’
In Germany and Austria used car sales are bouncing back as lockdowns are lifted. Research firm INDICATA, which gathers data from across Europe, has seen sports cars, petrol, hybrids and EVs all do well there.
Director Andy Shields said: ‘Germany and Austria, where car dealers are exiting a total lockdown caused by the Covid-19 pandemic, are seeing the used car sector quickly recover as consumers begin to treat themselves to new wheels.
‘Germany has seen its used market recover to 90 per cent of its March run rate and Austria 80 per cent after dealers started trading again.
‘But while the trends we have seen in Germany and Austria are very positive, they may not necessarily transfer to other markets based on a number of factors. They are both affluent countries with resilient economies and deep financial reserves.’
Investigation: Is now a good time to buy a used car and what will happen to used car prices?
Used car prices face volatile few weeks as CAP prepares to start moving values again
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