THE used vehicle market showed its first signs of cooling off in August according to INDICATA as consumer sales volumes fell by 3.3% year-on year.
During August the UK was the only one out of 13 European countries to experience a year-on-year fall with the sub-three-year sector down by 15.75%.
Volumes were also down by 50% in the sub 12-month sector caused by OEMs reducing their push on self-registrations and demonstrators as new car shortages continue following the Covid-19 pandemic lockdown. The six-nine-year age group was the only one to rise during August by 8.8%.
Hybrids and EV sales were up year-on-year by nearly 50% reflecting the consumers’ move to low emission used cars post lockdown. Meanwhile, the luxury and SUV segments were the only ones to experience annual growth in August.
Retail prices rose by 1.9% during August, which reflects the very high wholesale prices in the market, but INDICATA’s market data shows there are still strong profit opportunities to be had on dealer’s fast-moving stock.
Market stock levels actually grew by 3% in August as used cars stuck in the wholesale supply chain have finally seen the light of day. Many dealers have become more cautious in their buying habits as wholesale prices have remained very high.
INDICATA is encouraging dealers to keep a daily eye on prices and stocking days of slow-moving stock for fear of being stuck with it in the event of a market downturn.
Jon Mitchell, Group Sales Director, said: “The UK used car market saw an interesting blend of high prices, improving stock levels and a fall in demand year-on-year. Based on these trends, September could be more of a challenging used car month for dealers.
“Dealers must invest in identifying the fast-moving stock and trade out of the slow-moving stock quickly.2
BCA reported that used car demand continued strongly during August with average values exceeded £8,000 for the third month in a row.
Conversion rates remained high, typically exceeding 85% across the BCA online sales programme.
BCA sold record numbers of vehicles online in August, with daily online sales entries averaging over 6,000 units, along with a record number of 7,400 vehicles in a packed programme of sales online on Wednesday, 19 August, the highest volume of vehicles ever offered by BCA in online sales in one day.
BCA Chief Operating Officer UK Remarketing Stuart Pearson said: “The stable market conditions continued in August, and there was no let-up in activity as we approached the plate change on 1st September.”
“BCA has seen improving levels of supply reaching the marketplace throughout the period of the pandemic with well-matched demand for stock from our buyer base. The marketplace is operating very efficiently and this is good news for all professional operators in the used vehicle sector.
“Anecdotally, many dealers are telling us that their stock churn has improved significantly, with many holding lower volumes of stock but still selling as many vehicles as they might have expected pre-Covid19.”
“We continue to enhance our online auction programme to meet the changing needs of our buyers in the post-Covid market, utilising the connectivity and efficiency across the BCA Group to provide more of the right vehicles to the marketplace at the right time.”
Pearson added “Currently all sales remain online only and we’re keeping close to the latest government guidance in order to protect our people, customers and suppliers.”
“We have consistently released updates to the BCA Buyer app, introducing new functionality that makes it even easier for our customers to interact with our online auction platforms.
“BCA also introduced a new Click and Collect service to arrange vehicle collection nationwide, safely, socially distanced and in line with current Covid-19 guidance. Everything is arranged online, saving time and improving efficiency and we ensure vehicles are sanitised and ready for collection on time.”