Fleet and leasing companies contributing to pressure on used car supply, Cox Automotive reports
07 June 2021
Author: Sean Keywood
The second half of 2021 could be challenging for the used car market due to further stock shortages, with fleet and leasing companies joining competition for vehicles, according to automotive services firm Cox Automotive.
Its data showed the average price of a used car fell month-on-month in May, by £828 to £5,812, however this coincided with the average age of vehicles sold increasing by 11%, and the average mileage by 9%.
Cox said this showed used car dealers were expanding their stock profile to include older and higher-mileage vehicles, while new car market supply problems were still sending more buyers into the used market.
Insight and strategy director Philip Nothard said: "Used vehicle supply is being hampered by challenges in the new car market. This is making competition for used vehicles fiercer as fleet and leasing companies turn their attention to sourcing 'nearly new' cars, eventually driving prices, mileage, and ages higher at auction.
"We're hearing reports that the [new car production] semiconductor shortages and subsequent aluminium and rubber supply chain constraints are likely to impact the third and fourth quarter sectors. This is why I am urging the industry to be cautious over recent optimistic figures, as they potentially give false hope that things are returning to normal.
"The shortages in materials to build new cars could be far more damaging for manufacturers, suppliers and dealers than the entire effects of the pandemic.
"Manufacturers may be forced to decide between building cars or LCVs, and which market they support as they focus on profitability and maximum production. This will have a knock-on effect on the already strained used car market and rental sectors."