'Pent-up' demand for used cars still in the driving seat at auction rooms

8:45 am, July 27, 2020

Online auction rooms were packed out with buyers in July driving up prices for used car stock.

That’s the view of Cox Automotive as its latest market figures show ‘pent-up demand’ is still in the driving seat.

The firm says it has seen many online-only auctions attracting more than 300 buyers fighting each other for the best stock.

Cox Automotive has seen first-time conversions continue to increase at 84.80 per cent (as of July 26), with the auction house seeing a 6.7 per cent year-on-year increase against the same period in 2019.

CAP Clean performance has also exceeded 2019 figures, increasing by 3.9 per cent year-on-year from 93.02 per cent in 2019 to 96.94 per cent in 2020 for the same period.

Meanwhile, average prices have risen from £6,062 in 2019 to £6,426 in 2020 – a rise of six per cent.

Philip Nothard, customer insight & strategy director for Cox Automotive UK, said: ‘Post-lockdown across the UK, we’ve seen strong demand for all sectors.

‘Standout performance has been seen in older part exchange vehicles with sensible miles and a lengthy MOT, with some making close to double the guide price.

‘Online buying has undoubtedly made it easier for dealers to bid against their ‘mates’ whereas in the past it could be said that they operated a ‘one for me and one for you’ scenario.

‘Current strong, pent-up demand is demonstrated by the volumes of buyers online, with many sales seeing over 300 active buyers at any one time. In fact, for many of our evening sales, we are now seeing over 200 live bidders which is incredible.’

Nothard said in Cox Automotive’s recent dealer sentiment survey, two-fifths of dealers said they had increased their use of digital auction platforms due to lockdown, with nearly 50 per cent saying this will be a long-term change.

While 20 per cent of dealers said, they are going online in the short-term and intend to return to physical as soon as possible, as few as seven per cent stated they still have no intention to buy digitally.

The survey also revealed that two-thirds of dealers expect their use of physical auctions to stay at pre-Covid-19 levels in the medium to long term, while 13 per cnet expect their usage to increase.

While 23 per cent said they would either decrease or stop attending in the short to medium term, that figure falls to 11 per cent when asked about their medium to long term intentions.