Used car market bounces back after lockdown
17 June 2020
Author: Illya Verpraet
Sales of used cars in the first 10 days of June were 3.4% up on the same period last year, spelling potentially good news for defleeted vehicle values.
There is plenty of demand for used cars as the lockdown is easing, a report from market research firm Indicata shows. However, used car dealers remain cautious about replacing sold stock, which could lead to a scramble at auctions later, or be a sign of a new slump.
Based on insights from other countries, Indicata's analysts are positive however. 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 then demand should exceed supply throughout the rest of 2020 with prices continually strong.
"Indicata generates used car insights from 13 countries so looking at what has happened to the German used car market could be useful for the UK. German dealers opened on the 20 April 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."
At the same time, remarketer BCA is reporting high numbers of auctions on its online platforms, 5,000 vehicles getting auctioned today.
Unsurprisingly, sales of hybrids are doing well (up 22% year on year), while diesel continues its decline, falling 8%.
In some potentially bad news for fleets, sales of cars between 0 and three years old have fallen by 6.5%, while older cars have become more popular. Luxury cars and SUVs are proving popular, mid-size cars are performing as normal, while small cars (superminis and city cars) are experiencing a drop in popularity.