There are some encouraging signs that the used car market is performing well since lockdown restrictions were lifted.

In England, used car sales were up by 3.4% in the first 10 days of June compared with the same period in 2019, new data from Indicata suggests.

Looking at the seven days between the June 4-10, the used car sales picture looks even brighter with sales growth of 13.3%. That equates to around 12,000 used cars per day which is where the market was pre-lockdown.

Searches on the AA Cars website in the first week of June also showed encouraging signs of a recovery, rising by 9.1% compared to the first week of March.

However, Indicata analysis also shows dealers are being more cautious about replacing sold stock with sales exceeding supply by 71%.

That equates to the UK dealer network being short of 100,000 used cars against pre-lockdown levels which could cause a scramble to source stock in the coming weeks to avoid forecourt spaces being left empty.

The fleet and leasing industry is expected to escape the double digit decline in residual values (RVs) seen during the banking crisis.

Nevertheless, the lockdown has had a big impact on the used car market, with total sales falling by 8.3% in the first quarter of 2020 according to the SMMT. This was despite two strong months in January and February, both of which saw more sales than the same months in 2019.

Neil Gilligan, Indicate UK’s business development manager, said: “It is surprising how quickly the used market has bounced back from the Covid-19 lockdown.

“With reduced output from car makers and fewer dealer part exchanges and ex-fleet cars coming into the market then demand should exceed supply throughout the rest of 2020 with prices continually strong.”

Used prices have risen by 0.5% in the first 10 days of June and there are some immediate winners and losers post lockdown.

Hybrid sales were up 22% year-on-year, while diesel demand has fallen 8%. The 6-9-year-old and 9-12-year old sectors are both up by 10%, while the 0-3-year old sector has fallen by 6.5% reinforcing the market’s move to older and cheaper used car stock.

The sports and luxury car sectors remain the big winners, up 39.9% and 29.8% respectively. SUVs remain popular with a 11.2% growth while the biggest losers are the MPV and small car sector which were down by 12% and 5.5% over the same period in 2019.

Gilligan said: “Indicata generates used car insights from 13 countries so looking at what has happened to the German used car market could be useful for the UK.

“German dealers opened on the 20 April and experienced a swift bounce back to pre-lockdown levels like the UK has, and used car sales have continued to grow. This could bode well for the UK market for the rest of the summer.”

Top 5 search terms in June compared to May, April and March

Ranking	June	May	April	March
1	Ford Fiesta	Mercedes	Mercedes	Ford Fiesta
2	Mini	Ford Fiesta	Ford Fiesta	Mercedes
3	Mercedes	BMW	BMW	Electric
4	Electric	Audi	Ford Focus	Ford Focus
5	Fiat 500	Ford Focus	Mercedes C Class	Ford

Source: AA Cars 

James Fairclough, CEO of AA Cars, said: “The increase in searches for used cars is a really encouraging sign for the industry, following on from some very challenging months.

“Suggestions that commuters who usually use public transport might now opt to buy a car for their journey to work appear to be borne out with the surge in interest in city cars such as the Fiat 500.

“Equally positive is the renewed interest in electric vehicles. Searches for them fell away during the height of the lockdown in April and May, but they are back in the top five most popular search terms.

“During the lockdown, we all noticed that the fall in traffic resulted in less noise and an improvement in air quality, and this may encourage drivers to start making the transition towards greener vehicles which are better for the environment.”

Experts are predicting that the used car market will avoid the double digit decline seen during the banking crisis, read more in our May edition of Fleet News.