The used car market held firm during lockdown and is showing signs of bouncing back, new data reveals.
Two separate reports published this week show that overall the used car market is holding up well despite the obvious pressures of trading during the coronavirus pandemic.
Cazana’s latest data shows the overall pricing trend during the past 12 weeks since lockdown began was positive and the industry didn’t experience ‘a race to the bottom’.
Rupert Pontin, Cazana’s director of insight, said: ‘Throughout the last 12 weeks, Cazana has been encouraging the industry to stay strong on pricing and to get ready for the pent-up demand that we’re seeing released now.
‘To be clear, the overall pricing trend during the entire lockdown period was positive across all vehicle types apart from a small drop in diesel.’
Cazana found petrol cars gained the most, with an average increase of £1,258 from the start of lockdown to the end. Petrol-hybrid was close behind at £846 and BEV (battery-electric vehicle) increasing £414. Diesel prices dropped slightly by £157 on average.
While the used car market held strong during lockdown, research from Indicata reveals it has bounced back so far in June.
Sales of used cars were up 3.4 per cent in the first 10 days of June compared with the same period in 2019.
And between June 4 and 10, sales were up 13.3 per cent, equating to around 12,000 used cars per day, which is where the market was pre-Covid-19 lockdown, says Indicata’s analysis.
However, the data also shows dealers are being more cautious about replacing sold stock, with sales exceeding supply by 71 per cent.
Indicata warns that equates to the UK dealer network being short of 100,000 used cars against pre-lockdown levels, which could cause a scramble to find stock in the coming weeks to avoid forecourt spaces being left empty.
The data shows used prices rose by 0.5 per cent in the first 10 days of June and there were some immediate winners and losers post-lockdown.
Hybrid sales were up 22 per cent year-on-year, while diesel demand fell eight per cent.
The six-to-nine-year-old and nine-to-12-year-old sectors were both up by 10 per cent, while the nought-to-three-year old sector fell by 6.5 per cent, reinforcing the market’s move to older and cheaper used car stock.
Indicata found the sports and luxury car sectors remain the big winners – up 39.9 per cent and 29.8 per cent respectively.
SUVs continue to be popular, with a 11.2 per cent growth, while the biggest losers are the MPV and small car sectors, which were down by 12 per cent and 5.5 per cent respectively over the same period in 2019.
Neil Gilligan, Indicata UK’s business development manager, said: ‘It is surprising how quickly the used market has bounced back from the Covid-19 lockdown.
‘With reduced output from car makers and fewer dealer part-exchanges and ex-fleet cars coming into the market, demand should exceed supply throughout the rest of 2020, with prices continually strong.’
He added: ‘Looking at what has happened to the German used car market could be useful for the UK. German dealers opened on April 20 and experienced a swift bounce back to pre-lockdown levels like the UK has, and used car sales have continued to grow. This could bode well for the UK market for the rest of the summer.’
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