The UK’s used car market increased by 4.4% in the Q3 following two consecutive quarters of decline, with over 2m vehicles changing hands, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).
September recorded the largest growth in the quarter, with year-on-year growth of 6.3%. Despite the growth, spurred by the re-opening of showrooms and easing of lockdown measures across the country, the UK’s used car market is still down with 1,070,941 fewer transactions over the first nine months representing a decline of -17.5% overall.
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Sales in the fourth quarter are also expected to be heavily affected by new lockdown measures across the UK. The SMMT said the swift re-opening of used car outlets would go a long way to help prevent further subdued activity in the market.
Demand for pre-owned battery electric vehicles (BEVs) grew 34.4% year-on-year in Q3 and 4.4% year-to-date. At the same time, sales of plug-in hybrids increased by 35.7%, with 10,040 changing hands. Petrol and diesel cars both saw an increase in sales of 4.5% and 2.6% respectively, accounting for 97.42% of all used transactions during the quarter.
Mike Hawes, chief executive of the SMMT, said: “With England entering a fresh lockdown, and tighter Covid restrictions in place across the rest of the UK, the car is playing an even more important role in keeping society moving as public transport becomes less attractive for many. It is encouraging to see used car sales returned to growth but, as the pandemic continues and outlets in many areas are being made to close again, the short-term outlook is less positive.”
Industry reaction
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By GlobalDataIan Plummer, Auto Trader director, commented: “Car buyers may not be able to visit a forecourt in person, but demand remains exceptionally strong. In fact, in a survey of over 1,000 consumers last week, 57% said the new lockdown had made no impact on their decision to buy a car, and 7% said it made them want to purchase one even sooner.
“Retailers are also better prepared this time round, with the necessary infrastructure to continue selling in a meaningful way. Crucially, with click & collect and home delivery services permitted, many retailers are well placed to capitalise on the high demand. And with 50% of car buyers saying they’re willing to buy via click & collect or home delivery, retailers should be able to continue Q3’s momentum into the new year.”
Seán Kemple, managing director at Close Brothers Motor Finance, said: “In the current climate, it’s positive to see growth in used car registrations. The release of pent-up demand caused by the first national lockdown has spiked sales over this period, and the market has been able to hold onto a steady performance despite the sweeping restrictions hitting the car industry.
“Throughout the pandemic, consumers have turned to used cars and alternative finance for more affordable options. Consumer preference has also shifted from public transport to owning a vehicle, and this has helped to boost the used car market this quarter.”
James Fairclough, chief executive at AA Cars, said: “Two factors are behind the strength of the sector. Hundreds of dealers have successfully made their dealerships Covid-safe environments and adapted their businesses to enable them to deliver vehicles direct to customers’ homes.
“In addition, we’ve seen a shift in drivers’ buying patterns, with many opting for the value of a used car rather than buying new. Unfortunately England’s second lockdown has hit the pause button on the progress, even though many dealerships continue to offer delivery. Drivers buying remotely may wish to get their vehicle independently inspected for extra reassurance.
“While the prospect of a coronavirus vaccine has buoyed expectations for 2021, for now the industry is pinning its hopes on the government allowing forecourts to re-open at the beginning of December – so that dealers will be able to make up for the time lost in November.”
Karen Hilton, chief commercial officer at heycar, said: ”
“Exclusive research carried out for heycar shows that two in five people are currently thinking of changing their car – with one in eight wanting a new car this side of Christmas and the same number wanting to buy in January. Given the lead times on new cars at the moment, the used car market is primed to sweep up these customers. Those most actively looking to change car are in the 25-34 age bracket.
“So during the lockdown weeks in England, expect to see traffic to online dealerships and marketplaces continue to rise as people seek inspiration for their next big purchase. The more we can all do to provide an end to end service online will give people the choice and tools they need to buy. It’s never been more important for dealers to ensure they are engaging in the digital space at this time.”
Motor Finance tracked the resurgence of the UK used car sector in a recent feature, available here.
