Bounce Back Loans have kickstarted the used vehicle economy says Shoreham Vehicle Auctions

The Government’s Coronavirus £50,000 Bounce Back Loan is helping kickstart the used vehicle market, in particularly with cars older than four years of age according to Shoreham Vehicle Auctions.

The majority of independent dealers buying used vehicles from the past four Shoreham online auctions have admitted to using the funding to source replacement stock sold during the pandemic.

“The loan has given used car and van dealers a cashflow boost. With franchised dealers shut and no part exchanges coming into the used market many dealers had struggled to source replacement stock during the pandemic. Some were also cautious about investing cash in new stock when they weren’t sure how the used vehicle market was going to respond to the lockdown,” said Shoreham Vehicle Auctions managing director Alex Wright.

“The Government low interest loan has provided a lifeline for many dealers. 90% of those dealers we spoke to have all confirmed it has helped stimulate their businesses, which has in turn given the used market a leg up as it comes out of lockdown,” he added.

The five digital sales Shoreham has hosted since lockdown have seen strong bidding and prices way above CAP Clean. It has seen a big demand for cars over four-years old at under £10,000 which is likely to continue. And with no large dealer part exchange volumes due into the market over the coming weeks Shoreham expects prices to stay high.

The used van market has also been very buoyant with high conversion rates and prices up to 10% above CAP Average. Many smaller independent van retailers have been selling online throughout lockdown, but with no part exchange or de-fleeted leasing vehicles coming into the market there has been a pent-up demand with little or no replacement stock for them to buy.

Parcel delivery companies have been busy over the past 12 weeks and many have bought used vans to extend their fleets to cater for this increased demand. The sub-£4k utility vans are up 10% on March prices and 3-year old rental vans have also been making March money. However, the 19-plate vans have struggled as franchised dealer buyers have yet to enter the market with many buyers still on furlough.

“Van dealers also confirmed they have taken the £50k loan and as soon as auctions opened for business, have invested that money in replacement stock. With many extended leasing contracts in the market, we predict that even when the franchised dealers come fully back online stock is likely to be thin on the ground and prices will remain strong,” explained Wright.