Car dealers should be braced for return of pent-up demand, stock shortages and rising prices as Lockdown 3 ends

Time 3 months ago

Car dealers should be braced for a rush of buyer demand for used cars and expect prices to remain high as Lockdown 3 ends.

Plans to map the way out of the current third national lockdown are expected to be revealed on February 22 by the prime minister, but there’s every reason to feel optimistic as the country emerges from lockdown believes Cazana’s director of insight, Rupert Pontin.

Speaking on Car Dealer Live earlier this week, Pontin said the outlook is ‘pretty good’ for the rest of the year, while in the immediate short term dealers should be prepared for a strong sales push as customers return to showrooms, along with stock shortages and prices remaining high.


‘It won’t the quite as strong as the two previous lockdowns,’ he said in the interview which you can watch below, ‘but I do think there will be a push.’

He went on to say: ‘By the time we get to the end of lockdown, I expect there to be a bit of a sales push because of pent-up demand – not everyone wants to buy online.

‘Buying online is getting better but there are still people who will want to go and buy a car, see the car, drive it and enjoy the retailer experience, which is still very important to some people and will come back.’

Pontin explained this could in-turn result in stock shortages just like in the two previous lockdowns, as dealers scrabble for the high-quality stock to plug gaps on their forecourts.


He added: ‘I think – this is based on personal feeling not the data we are seeing – we will continue to see prices rising – not by a huge amount, but certainly the indications from the data would suggest that’s the case judging by the historical performance of the two previous lockdowns.’

Other factors will affect the used car market in 2021 too such as stock profile, remarked Pontin.

‘The business marketplace will have stock it needs to churn, so the profile of the stock in the marketplace will change and we need to watch this through the entire year – with lower mileage vehicles coming to the marketplace that would naturally increase retail pricing.

‘Overall, the used car market, on the basis of that we are going to have a successful rollout of the vaccination process, it’s looking pretty good for the year.’

Pontin’s views are backed up by Mike Jones who, writing in ASE Global’s Average Car Retailer Profitability report published earlier this week, said that while Q1 will ‘undoubtedly’ be hard, the 2021 outlook is encouraging.

He said: ‘Once the showrooms are reopened we are likely to see a boom in trading as customers spend some of the cash they have saved during the lockdown period and they decide to come out of some of the leased vehicles extended in 2020.’

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Chairman and chief executive of TrustFord, Stuart Foulds, told Car Dealer in an interview published later this week, there’s every reason to be optimistic.

He says the market will see pent-up demand returning, and, in the new car sector for instance, returning business from customers whose PCP finance agreements have come to an end.

Average dealer lost £3,000 in December but it was a ‘great month’ given 2020’s challenges


James Batchelor's avatar

James – or Batch as he’s known – started at Car Dealer in 2010, first as the work experience boy, eventually becoming editor in 2013. He worked for Auto Express as editor-at-large and was the face of Carbuyer’s YouTube reviews. In 2020, he went freelance and now writes for a number of national titles and contributes regularly to Car Dealer.

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