Dealers set for a bumper post lockdown used car market, while lack of supply will increase prices reports SVA
Dealers are set for a few bumper used car months now they are open for business predicts Shoreham Vehicle Auctions’ (SVA) managing director Alex Wright.
The used car market has continued to grow in strength during lockdown to the point that demand, and prices are back to where they were before dealers shut their showroom doors in late December.
SVA saw prices drop to 80% of CAP Clean during lockdown but gradually return to their usual levels in March despite dealers still only being able to supply cars on a click and collect basis.
“Each month in 2021 we have seen the used car market grow and prices steadily improve,” explained SVA’s managing director Alex Wright.
“Buyers have been itching to get back into the halls and start to view and bid on cars physically. All the signs are that the used market will continue to be strong into the autumn, the only challenge will be a lack of stock,” he added.
Dealers have started to stock up their forecourts and more consumers are starting to buy used cars as they spend some of their household savings built up during lockdown. Home and garden improvements and buying a new car are what experts predict consumers will spend their money on post lockdown.
The only restriction on sales will be lack of used stock. As dealers have been shut for over three months the level of part exchanges coming into the market will take a while to improve. Some manufacturers are reporting long lead times on new cars which may not start to ease until the autumn which will cause fleets to extend their replacement cycles, which will further restrict used stock entering the market.
That signals demand exceeding supply which will mean prices will rise again in the wholesale and consumer markets.
“Prices have risen in 2021 and will continue to rise until market stock levels improve. This may be as late as September when the new 71-plate comes into being which will pump much-needed used stock back out in the market,” he added.