Used car sales were down 8.9 per cent in the first quarter of 2021 year-on-year, according to the latest data from the Society of Motor Manufacturers and Traders (SMMT).
However, the figures showed that the market was rebounding significantly in March with sales up 32.2 per cent year-on-year.
Some 1,687,755 used car transactions took place in Q1, with the overall decline driven by large falls in January (down 27.1 per cent) and February (down 19.4 per cent) while showrooms were shut and travel restrictions were in place.
While these figures compare to a difficult March in 2020, 638,570 of the sales in Q1 were made in this month alone.
Used car transactions were down 8.4 per cent compared to March 2019.
A Car Dealer investigation, released this morning, found the used car market will likely be supercharged throughout 2021 as new car supply is restricted further and the growth seen in March is only the start.
The investigation found that the semiconductor shortage was the biggest problem facing the new car industry, and will likely drive even more demand into the used car market.
Predictions are that this issue persist, with supply problems really expected to set in during the second half of 2021.
SMMT chief executive Mike Hawes was reserving judgement on the extent of the growth with last year’s figures hindered by the worst of the lockdowns.
He said: ‘These figures lay bare the turbulent impact of coronavirus lockdowns on the used car market and, while March’s performance suggests there is some pent-up demand, this is against a weak month last year, so its true extent remains to be seen.
‘The second quarter will see significant growth as last year’s April and May markets were severely limited by lockdown measures.
‘It’s vital that the used market is rejuvenated to help sustain jobs and livelihoods, drive fleet renewal and support environmental progress.
‘With car showrooms open again and the UK coming out of Covid restrictions, the sector can look forward with renewed optimism.’
Jim Holder, editorial director of What Car?, said about the results: ‘Retailers are reporting strong used car demand, and pinning much of their financial recovery on the market remaining buoyant.
‘To date, since lockdown eased, demand is reported to have been incredibly strong – but it is imperative that the momentum continues.
‘To some degree this has also been boosted by new car stock delays caused by the global shortage of semi-conductors, prompting some buyers to look at nearly new models as an alternative.
‘Our latest research of 2659 in-market buyers found 36 per cent of new car buyers are looking to switch to nearly new or used models if their vehicle cannot be delivered in time.
‘For consumers however, that does mean that used prices are rising – and that trend looks set to continue while demand is strong and supply relatively weak.’
Meanwhile, Auto Trader director Ian Plummer added: ‘As you’d expect when comparing against a pre-pandemic January and February, 2021 looks to have had a slow start.
‘However, given the context of closed showrooms, the performance of the used car market in Q1 is very positive and highlights the success retailers made of their buy online channels.
‘Even factoring in the influence of Covid, which had only just started to be felt last year, March was incredibly strong and I doubt many within the industry would have ever believed that circa 90 per cent of ‘normal’ sales volumes could have been achieved from online alone.’
Plummer also commented that Auto Trader believes ‘used car demand will continue apace for some time to come’, although he added that the months ahead will still have it’s challenges.
CarGurus’ director of Industry Insights & Analytics, Kevin Roberts, also said: ‘The ongoing semiconductor shortage is directly impacting new vehicle availability which is likely to have a cross over impact on used as well.
‘With demand for private mobility increased in a post COVID environment historically new shoppers may look to used which could further decrease used obtainability and increase prices.
‘With the semiconductor shortage expected to impact production through at least the second quarter we should expect the impact on new & used to last until at least the third quarter and potentially longer.’