The used car market has a long way to drop before anyone should begin to worry about the booming second hand car market fizzling out.
Data from Auto Trader shows interest in used cars has been up on last year every month since lockdown with an average of 20 per cent more consumers hunting for vehicles.
A combination of more buyers wanting personal space as they actively avoid public transport, allied with a large number of people with more money in their bank accounts looking to treat themselves, is helping drive an already buoyant market.
In an exclusive video interview with Car Dealer, Auto Trader director Ian Plummer tells us there are plenty of reasons for dealers to be cheerful as we enter the darker winter months.
Plummer said Auto Trader is seeing visitor numbers maintained at a level 20 per cent above this time last year and ‘even if it drops, it will still be good’.
He said: ‘We saw a 7.6 per cent growth like for like in September for used car prices.
‘They could soften, just like demand, but there’s some way to go before they go to anything like we saw with the financial crisis 10 years ago.’
Plummer said he is ‘optimistic’ about Q4 and that the Auto Trader ‘bellwether’ is showing a healthy market for some time to come.
He said that there was ‘definitely’ a pent up demand theme following lockdown, but the ‘extent and sustainability of that demand’ surprised everyone.
Plummer added: ‘Even if things do drop from where they are, there’s a long way to go before they fall below last year.’
Auto Trader has seen a spike in demand for cheaper and older cars and that has resulted in a well documented used car price rise for the sub-£10k bracket.
This has been intensified because 10 years ago the car industry was grappling with the financial crisis and less cars were changing hands.
This, combined with a scrappage scheme that took many cars off the road, means the 10-year-old car market is smaller than it would otherwise be, explained Plummer.
Plummer said there’s definitely an ‘opportunity’ for dealers in the older market and they’ve seen many stock profiles changing for dealers as they look to capitalise on these shifting trends.
Taking an optimistic view of the future, he says many people are looking for a car to have their own personal space and he can’t see this changing.
That’s on top of a ‘new bucket’ of buyers out there who are now looking at buying a car for the first time.
‘Household finances are healthier and many people have not been able to spend and have paid off debt,’ said Plummer.
He added that while Brexit and a threat of a second lockdown were concerns, affordability ratings among Auto Trader users is better than at the turn of the year and retailers can capitalise on those buyers who have confidence.
The full interview – which includes Auto Trader’s thoughts on the new car market – can be watched by clicking the video above.