Used Car Market: Will it Get Back to Normal?

We are all feeling a bit uncertain at the minute and wondering what the used car market is going to do over the coming weeks and months. I attended a few webinars over the past week and can say the feeling I got from these were positive.

Market Trend in Sale Prices

From the data below you can see the uncertainty directly affecting used car prices caused by Covid-19. Prices across the country went down as dealerships were trying to get rid of stock and were willing to drop their prices to do this. 

From late May with the announcements of dealerships being able to open their doors again and start welcoming customers back these prices have recovered to before the lockdown.

We expect these prices to stay consistent but there may be a slight rise in the coming months due to panic buying of new stock through auction sites and dealerships competing to replenish their stock volumes.

Sales Observation Count

When looking at sales numbers across the board, these were greatly affected by the lockdown since late March. This was due to many dealerships closing their forecourts due to the lockdown restrictions the UK government put in place. 

We do see that this value doesn’t hit zero as many smaller independent dealers and dealerships who have adopted good online sales processes have been able to still sell cars and dealerships who have pivoted to allow for contact-free click and collect or contact-free delivery services have performed well during this time.

As you can see below the market hit 4% of normal sales at its lowest point during lockdown but has been recovering well since this. We are looking at sales being back to 43% of normal at the beginning of June and predict a sharp rise as the dealerships re-open for business.

Average Days to Sell

Average days to sell vehicles has been greatly affected and the length of time vehicles will be sitting on the forecourts will be extended due to lockdown but this will start to come back to normal as sales start to increase again.

Fastest Selling Used Cars

After analysing both our own market data and that from SMMT and Glass there is a clear trend towards buyers looking for higher mileage, less expensive cars. I have included a table below of the fastest-selling cars in the UK right now according to Glass’s and you can take a look at our data on what is selling via Facebook Marketplace here.

* Above table is based on the overall UK market

As you can see lower priced, higher mileage vehicles are generating the fastest sales in the market right now. This may be something you want to consider when restocking over the coming months.

Predicted Used Car Sales for 2020

If you look at the chart below you will see that although lockdown greatly affected the overall number of sales, most of the industry is predicting sales getting back close to normal numbers by the end of 2020 based on there being no second wave of the pandemic. 

This is very promising reading and with auction houses opening again and online auctions getting back to normal over the coming months this trend will continue.

Summary

Although the whole industry has been massively impacted and is still in shock from these unprecedented times there is a light at the end of the tunnel. On Carlover and across other platforms we have seen a rise in stock for the first time since the lockdown came into effect. Dealerships are starting to sell more cars and the industry is recovering quickly. 

Dealerships should really be looking at this time as an opportunity to clean out stock of undesirable cars, look at their online presence and make sure that if anything like this happens then they have their business set up to be able to continue via a cohesive digital approach.

If you would like to enhance your digital presence get in touch and we can talk to you about your website, social media, advertising and all other aspects of putting your best foot forward online.

* Charts sourced from market webinar by Glass’s Autovista Group