The used car market ‘performed above expectations’ in January, says Auto Trader.
Dealers have also been holding firm on pricing which is helping to keep prices strong, the firm said.
Auto Trader’s latest data shows most retailers were trading at between 60 to 70 per cent of usual volumes.
Traffic on its marketplace was particularly high in January with 53.6m cross platform visits recorded – an increase of more than 1.6m compared with the same period last year.
A daily average of 1.3m users in January resulted in a circa 10 per cent year-on-year (YoY) increase in the number of leads being sent to retailers.
The figures back up sentiments expressed in a special Car Dealer Live featuring Marshall Motor Group CEO Daksh Gupta and Auto Trader boss Nathan Coe.
In the show – which you can watch above – Gupta said the dealer group was outperforming the market thanks to brand mix but also the high number of consumers willing to buy remotely using click-and-collect/deliver services.
Coe, meanwhile, said car sales in Lockdown 3 are currently at two thirds of last year’s figures – above the prediction Auto Trader made of 50 per cent at the beginning of the year.
Auto Trader has also carried out research on the impact the latest lockdown is having on buying intentions, and overall found it’s limited.
An on-site survey conducted in January, revealed that consumers’ confidence in being able to afford their next car was at its highest level (8.68/10) since Auto Trader began tracking it in January 2020.
If the restrictions remain as is, we expect this level of transactions to continue, and potentially strengthen towards the end of the lockdown
January’s figure surpassed the previous peak recorded in December (8.49/10), and even ahead of confidence levels recorded pre-pandemic (8.11/10 in January 2020).
Some 45 per cent of those surveyed said they were more confident than they were a year ago, up from 43 per cent in December, and 45 per cent felt about the same. 60 per cent said the new restrictions had not affected their desired timeline to purchase.
Commenting on the performance, Coe said: ‘Whilst we appreciate not every retailer is seeing the same positive levels of activity, it’s very reassuring to see and to hear anecdotally from many of our retailer partners that businesses are performing consistently way above the levels we saw during the first lockdown and at similar levels to the second.
‘If the restrictions remain as is, we expect this level of transactions to continue, and potentially strengthen towards the end of the lockdown as we’ve seen previously.
‘Overall, much as we saw when exiting the two previous lockdowns, we’re feeling confident the market will be in a robust position once the restrictions are lifted.’
The research also revealed the growing importance of car ownership as a result of Covid-19, with 49 per cent of the circa 1,000 consumers surveyed believing that owning a car is more important to them now than it was before the pandemic – up on the previous high of 35 per cent, recorded in December.
Auto Trader said it’s also seeing around 11 per cent of on-site users are in market to buy a car specifically to avoid public transport.
Used car prices remain strong
Meanwhile, Auto Trader reported average used prices remained exceptionally strong in January, recording a year-on-year increase of circa seven per cent, marking 10 months of consecutive price growth.
The firm said this was driven by the robust levels of demand in the market, as well as some continuing supply constraints. Retailer activity has remained stable, and relatively consistent with same period last year, based on analysis of retailer pricing behaviour last month.
Last week’s average of 2,359 retailers making daily price adjustments is 107 fewer than a year earlier, and below the pre-lockdown average of 2,500 – 3,000.
A total of 16,775 vehicles were repriced during the week, which is also below the typical levels seen during normal trading conditions (17,500 – 24,000).
Pre-Covid-19, retailers typically lowered prices between £250-£550 per day; Last week, the average price reduction was £303.
Coe added: ‘The current performance is testament to how essential online retailing has become for many car buyers, and whilst many will no doubt enjoy the opportunity to visit showrooms and forecourts once retailers reopen, a significant proportion will still prefer to combine that with the convenience of digital for many more stages of the buying journey.
‘It’s our ambition to support retailers with this transition, by providing the technology and tools they need to compete, and to help all of our customers access this growing audience, regardless of their size.’