Used car sales crash in lockdown

Dealers report surge in motorists snapping up cheap used cars to avoid public transport – but sales of secondhand vehicles still slumped

Sales of secondhand cars crashed during lockdown, but dealers have since reported a surge in demand for bangers as commuters shun public transport.

Just over 1m used cars changed hands in the second quarter of the year, down 48.9pc compared with the same period in 2019 according to the Society of Motor Manufacturers and Traders (SMMT).

However, analysts say that sales have since taken off as buyers seek out cheap vehicles which can replace the train and bus.

The lockdown in late March froze the market for several months after what the trade body said was a bumper January and February.

Dealerships in England were allowed to reopen their doors on June 1, with Wales and Scotland following soon after. This was not sufficient to propel sales into growth mode, with an annual decline of 17.5pc in the month.

But second-hand dealers are now reporting a massive surge in interest – particularly for small cars and older, cheaper “bangers” – as the public heeds government advice to use public transport only when absolutely necessary.

James Baggott, editor-in-chief of Car Dealer magazine, said: “Every single dealer I speak to says they can’t sell enough used cars – they are flying out the door.

"A lot of people are moving out of new cars and into used ones instead, with them massively outselling new cars at a lot of dealers.”

Sales would have been even higher had dealers been able to source more secondhand cars to sell, he added.

Coronavirus shut down vehicle auctions, Mr Baggott said, hitting the number of former company cars moving into the market. Meanwhile many cars bought new on finance are still with their initial owners after dcredit deasl were extended to help families suffering hardship.

Figures from car sales website Auto Trader underline dealers’ experiences. Its retail price index, based on analysis of 900,000 vehicles a month, showed that used car prices in July notched up the biggest monthly rise since August 2018. 

The average sticker price of a used car last month was £13,888 – a 4.6pc year-on-year increase and the fourth consecutive month of price growth.

Demand for old bangers was also confirmed.  Auto Trader found that demand for vehicles 10 to 15 years old jumped 23pc in July compared with last year, while supply fell by 16pc.

Vehicles in this age bracket recorded the highest price growth, up 10.4pc to an average of £4,254. Vehicles up to 12 months old rose the least, up 2.6pc to £26,500.

Richard Walker at Auto Trader said: “Used car prices have benefited from high demand in the market while the supply side has  emerged more slowly from lockdown.

"Even when auctions reopened, the supply of new stock in the market has been slow to return to pre-Covid-19 levels, whilst demand has remained at record levels.”

Some of the quarterly decline is thought to be down to a drop in private sales, which are also included in the data.

Economic uncertainty caused by coronavirus, combined with pre-existing worries, is also likely to mean the public are holding on to their vehicles for longer as they shun big-ticket purchases.