Falling demand for used cars, experienced in April for the first time in 2009, has continued in May. 

Manheim Retail Services managing director John Simpson said: “The month-on-month decline in consumer showroom and online enquires for used cars were both down quite sharply from 27 and 17.2 respectively in April to 22 and 13 in May.”

Consequently, dealers’ used cars sales were down from an average of 13.4 units in April to 11.6 in May. 

He added: “This contraction comes after a very strong first quarter for used cars and has affected all vehicle segments. Interestingly, dealer conversion rates of test drives to sales have actually increased in May over April, up by nearly 3%.

But the emphasis now must be on dealers driving increased showroom footfall by targeted, effective and measureable online and offline marketing activity.” 

On the wholesale market, Manheim Auctions & Remarketing managing director Mike Pilkington said: “2009 continues to defy all historical analysis of the wholesale market.

Typically at this time of year we see values begin to level off or even fall, but the extraordinary bounce experienced in Q1 has continued into Q2 with stock for retail values up nearly £450 in May to £7,801, compared with £7,353 in April.” 

Lower age and mileage vehicles coming into auction go some way to explaining this continued strength, but the fact is that auction halls are still very busy with significant additional demand coming from online buyers “attending” via Simulcast. As a result, May first-time sale conversion rates of stock for retail are still at 86%. 

Regarding part-exchange disposal, Pilkington added: “The market strength is carrying right through with values up £57 in May compared with April and all vehicle segments experiencing an increase in month-on-month prices, resulting in conversion rates remaining in the mid-80s.”

For the future, though, Pilkington added a note of caution: “While values remain strong in the wholesale market, there are signs of retail weakness that may have a negative effect on this currently buoyant wholesale market in the coming months.”