Government Bounce Back Loan scheme keeps up used car and van demand
08 June 2020
Author: Illya Verpraet
The Government's Bounce Back loans are allowing used car and van dealers to buy new stock, keeping up demand, says Shoreham Vehicle Auctions.
The scheme lets small and medium-sized businesses borrow between £2,000 and up to 25% of their turnover, with a maximum of £50,000, at 0% interest for the first year.
Shoreham Vehicle Auctions says that the majority of independent dealers buying used vehicles at the company's last four auctions admitted to using the funding to buy new stock.
Shoreham Vehicle Auctions managing director Alex Wright said: "The loan has given used car and van dealers a cashflow boost. With franchised dealers shut and no part exchanges coming into the used market many dealers had struggled to source replacement stock during the pandemic. Some were also cautious about investing cash in new stock when they weren't sure how the used vehicle market was going to respond to the lockdown.
"The Government low-interest loan has provided a lifeline for many dealers. 90% of those dealers we spoke to have all confirmed it has helped stimulate their businesses, which has in turn given the used market a leg up as it comes out of lockdown."
The auction company says that demand was strongest for cars over four-years old at under £10,000. It expects values and interest to remain fairly high as it will take some time for part-exchange cars from main dealers to come into the market.
It was the van market, however, that was strongest, as parcel companies have started buying used vans to meet the immediate demand.