Car auction firms believe that values for used petrol and diesel cars will remain strong or could increase, despite a decline in the used car market.
Motor auction members of the National Association of Motor Auctions (NAMA) have told the trade body that internal combustion engine vehicle values have held steady during the recent lockdown in the United Kingdom.
In a recent survey it found that 90% of respondents believe both petrol and diesel values would remain strong or further increase. Auctioneers also say first time conversion rates are performing well, with 67% expecting rates to increase over the next month, with the remaining 33% expecting them to stay the same.
Data published by Cap HPI shows trade values declined by an average of 1.4% (£150) at the three-year point last month, however, as reduced sales activity meant that there had been less demand for car retailers to buy stock.
NAMA’s findings come on the back of the used car figures being published. In Q4 2020, there were 1,693,138 used car transactions, which is down -6.2% from Q4 2019. The overall 2020 year-to-date figures were down -14.9% at 6,752,959 transactions.
In response to the figures, the SMMT has joined with the National Franchised Dealers Association (NFDA) in calling for car showrooms to be re-opened as soon as any easing of lockdown restrictions allow after the results once again laid bare the impact of closures.
Louise Wallis, head of NAMA, said: “In line with expectations, petrol and diesel values have remained extremely strong. The strong values, coupled with robust conversation rates, demonstrate that there is an appetite for vehicles at auction. As consumer confidence remains high, we anticipate there will be significant pent-up demand for stock once lockdown restrictions are eased.”
Reflecting on 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.