Used car sales might have halved but the future’s bright for fleets
UK used car transaction data has just been released and it’s not all bad news for fleets and the automotive industry at large.
While the statistics show that the used car market halved in the second quarter of 2020, the year-to-date decline and more recent car sales suggest there might be brighter times ahead.
In 2019’s second quarter, more than two million used cars were sold in the UK, some 48.9% more than the number of transactions we saw in April, May and June this year. Indeed, that second quarter of 2020 represented more than 85% of the total 1.16 million sales that have been lost so far since January 1st.
The reasons for the dip might seem obvious but it’s been further emphasised by a strong start to the year that went before it, in January and February 2020. And since the seemingly unavoidable year-on-year loss peaked at 74.2% in April, the same statistic was down to just 17.5% in June.
There’s the first glimmer of light at the end of the tunnel.
That January/February bumper and the easing of the lockdown are the most likely causes for a smaller than expected loss in the first six months of the year overall. You see, incredibly, used car sales in the first six months of the year are only down by 28.7% year-on-year, with 2.89 million vehicles being sold altogether.
There’s glimmer two. And now for the third!
The latest insights from British Car Auctions (BCA) suggest that values stabilised in July, less than four months after the national lockdown commenced. While month-on-month values were slightly down, volumes of vehicles sold increased by more than 30%.
What’s more, BCA posted record numbers of cars for sale online this July: generally more than 5,500 vehicles per day and often more than 6,000.
Chief Operating Officer for BCA’s UK Remarketing, Stuart Pearson, said: “Demand across most sectors is ahead of what we would typically see at this time of year.”
Pearson’s comments throw further light on research released by Close Brother Motor Finance last week, which suggested that we shouldn’t worry too much about used car sales data from the second quarter.
Their research, conducted last month, shows that 73% of car dealers fully expect demand for used vehicles to overtake new in 2021, which would be a significant change from the state of play before Coronavirus.
Managing Director Seán Kemple said “Q2’s figures for used car sales are interesting, but they paint a picture worlds away from today’s market. It will come as no surprise that sales plummeted to near-zero in the months of total lockdown; in fact, it’s a positive sign in the grand scheme of public health.”
All the signs suggest that we’ll see a stronger surge in demand for used cars in the third quarter of 2020.
But what do you think?
Is the future really as bright as the latest figures might suggest? And what about new car sales? Will socially-distanced production lead to a shortfall of stock and will we see a superficial dip in sales?
Drop a comment below to give us your take on the matter.