Dealer Auction anticipates a ‘used car boom’ this year, following a strong performance in Summer 2020.
The digital wholesale marketplace believes the used market is a “glimmer of hope” for the industry.
“It goes without saying that 2020 was a challenging year for the car industry. But it’s true that out of challenge comes opportunity – and, going into 2021, it’s clear that the used car market is more important than ever,” said Le Etta Pearce (pictured), CEO of Dealer Auction.
Reflecting on parent company Cox Automotive UK’s Q3 Dealer Sentiment Survey, which found that two-thirds (64%) of dealers expected used car transactions to increase in 2021; Dealer Auction believes this outlook is still realistic despite the UK starting the year by entering its third national lockdown.
“We share our dealers’ optimism in that used car transactions will increase in 2021. It’s not likely that the latest lockdown restrictions will change this sentiment, as winter restrictions were unfortunately always on the cards, and many dealers are continuing to operate online, as they did during the November lockdown,” Pearce added.
The factors that drove the summer 2020 ‘mini-boom’ in used car sales are still relevant, according to Dealer Auction. Firstly, used cars are in a strong position to be the main beneficiary of slow new car sales, which suffered their worst year in nearly three decades in 2020, and now face further uncertainty over Brexit. The used car market, on the other hand, despite struggling during the first 2020 lockdown, staged an impressive comeback in June, registering a drop of just 17.5% (up from a 74.2% drop in April).
Dealer Auction also cited new audiences as a potential continuing driver of success in 2021, with people moving away from public transport in favour of a ‘safe space’ vehicle. There has also been a rise in interest from young drivers – in September 2020, Auto Trader reported a sharp year-on-year increase of 18-to-24-year-olds looking at cars on their website. These, Dealer Auction says, present dealers with exciting new marketing opportunities for the year ahead.
Lastly, Dealer Auction also pointed to pre-Covid signs that the used car market was picking up, after three years of decline, and says the pandemic served to sharpen this focus. The Society of Motor Manufacturers and Traders (SMMT) reported the strongest performances in November and December 2019 since the same months in 2016.