BCA has claimed that used car values have “steadily risen” during the COVID-19 lockdown period which prevented the majority of UK car retailers for trading.
The remarketing specialist said its valuations data had shown that used car values and demand from professional buyers had increased in May, with values strengthened as the number of online bidders participating in BCA’s Virtual Sales climbed significantly.
BCA announced the introduction of online only sales on March 25, initially selling exclusively via the fixed price BCA Buy Now platform, before introducing a programme of Virtual Online Sales through BCA Online and the BCA Buyer app during April.
BCA’s chief operating officer for UK Remarketing, Stuart Pearson, said: “We reported two weeks ago that momentum was building in the used vehicle sector and thanks to the efforts of our people, suppliers, partners and customers, we have delivered a comprehensive digital remarketing programme that complies with safety legislation and Government guidance.
“There has been a huge amount of customer interaction through our online channels, with activity growing daily and some Virtual Sales seeing buyer participation ahead of those seen in pre-lockdown conditions.
“We have seen demand grow steadily for stock, with acceleration through differing price points throughout the period.
“In the initial stages, buyers were very much focussed around lower value vehicles, however as more buyers enter the market, we’re seeing greater stability across all sectors.”
BCA said that the average age and mileage of vehicles sold in recent weeks had increased compared to the immediate pre-lockdown period, with the average car sold being around six months older and having covered 10,000 more miles.
Average weekly values in online sales at BCA rose over the two-month period since the lockdown was first introduced, from £4,568 in the first week of April – more than £5,000 less than its ‘headline used car value’ of £10,002 reported in February – to £8,788 by the fourth week in May.
Values strengthened noticeably in May as more buyer customers interacted with BCA’s online channels, it said.
BCA reports over 500 online bidders competing in some of its Virtual Sales channels later in May, adding that “it was noticeable that buyers turned their attention to higher value, younger vehicles as the weeks passed”.
Pearson said: “With traditional business models needing to change, the remarketing sector is quickly evolving and BCA will continue to look for innovative ways to support its customers during the months ahead.”
Cap HPI's head of valuations, Derren Martin, has urged used car retailers to “hold their nerve” and not rush to liquidate stock ahead of an anticipated rise in sales demand following June 1’s re-opening of car showrooms across the UK.
Martin warned that the sector could be headed for a volatile period due to fluctuations in supply and demand as the automotive retail sector navigates out of the COVID-19 coronavirus lockdown period.
“For stability in the market, it will be down to vendors at every stage of the remarketing journey holding their nerve, as the majority of car dealers have done on price thus far," he said.