The National Association of Motor Auctions (NAMA) has said that first-time conversion rates are set to rise as used car demand increases with the easing of COVID-19 lockdown restrictions.
While physical auctions remain closed to traders during ‘Lockdown 3’ head of NAMA, Louise Wallis, said that sales activity is already on the rise as car dealers begin to stock their forecourts ahead of the arrival of demand pent-up over recent months.
Wallis said: “The latest NAMA survey shows strong demand from dealers for forecourt stock. This is due to an expected rise in consumer sales post-lockdown. The auction market is expected to remain strong over the next few months to fulfil this demand.
“Even though auction sites remain closed for sales, online activity has ensured the wholesale market has remained strong and able to meet the demand of both auction buyers and sellers.”
Auto Trader reported yesterday (March 15) that its data for the first week on March showed that dealers’ retail activity was already on the rise, with many operating at 90% of normal volumes for the time of year as customer confidence reached record levels.
Respondents to a recent survey carried out by NAMA revealed that there is growing confidence that first time conversion rates and auction volumes will increase as the UK comes out of lockdown.
Well over half of respondents (55%) said that they expected rates to increase over the next month, while over a third (36%) expect rates to remain the same.
Further, 63% of respondents are expecting an increase in auction volumes over the next month.
Increased auction volumes and first-time conversion rates could indicate that consumer confidence is growing and demand for vehicles is rising, NAMA said.
Data from recent sales shared by Aston Barclay indicates that demand for used cars is already ramping up among car retailers keen to be ready for the return to showroom trading proper.
Aston Barclay sells more used cars more quickly in February as dealers buy stock to fill forecourt spaces
The remarketing specialist said that it had sold 12.6% more used cars in February than January, with stock taking two fewer days, on average, to sell.
Aston Barclay reported that overall prices in February had softened, however, with fleets having seen prices reduce by 9.4% in-line with Cap HPI predictions over the last five months.
The sweet spot for the wholesale used market remains at between £8,000 and 12,000, Aston Barclay said.
Aston Barclay’s customer managing director, Martin Potter, said: “There are lots of new car orders in the pipeline particularly within the leasing sector, but many cars are experiencing four to six months between an order and delivery.
“Combined with a shortage of dealer part exchanges we are predicting a used car shortage once the market re-opens.
“There is likely to be a pent-up demand in April similar to when the market re-opened in June 2020.
“That spells good news for prices, but supply will take a few months before it catches up with demand.”