The used car market has suffered a decline of 8.3% amid the Coronavirus pandemic, according to new data from the Society of Motor Manufacturers (SMMT).
Growth in January and February, up 2.9% and 4.0% respectively, was wiped out by a 30.7% fall in March, making it the lowest March on record as coronavirus lockdown measures that came into effect partway through the month closed retailers.
Demand for pre-owned plug-in electric vehicles grew 13.6% in the first quarter, after a bumper first two months when buyers took advantage of more of these zero, and zero-emission capable, models appearing on the used market.
The number of hybrids changing hands also rose, up 11.5%, taking the total number of used alternatively fuelled vehicle (AFV) sales to 36,493.
Petrol and diesel car transactions decreased 9.3% and 7.8% respectively, though combined they still accounted for 97.9% of all used sales in the quarter, equivalent to 1,814,598 cars.
Mike Hawes, SMMT Chief Executive, said: “Encouraging growth for used car sales was wiped out in March as the coronavirus lockdown measures were introduced and, this subdued activity is likely to continue into the second quarter. While it is tricky to predict future demand, the impact of social distancing requirements on public transport means that, for many people, the car will play an even more important role in helping them travel safely to work. Re-opening new and used car outlets will support this, enabling more of the latest, cleanest vehicles to filter through to second owners and help support the UK’s green growth agenda.”
Despite the challenging market conditions, the latest industry data indicates that average used car residuals are holding firm, with prices in March remaining broadly stable, down only 0.2% year-on-year at £13,601. Data also suggests that, despite lockdown measures being in effect, consumers are continuing to search and browse used cars online with many still looking to buy when the time is right.
James Fairclough, CEO at AA Cars - the AA’s used car website, said there are some encouraging signs that latent consumer demand is building and that sales will begin to pick up as soon as the dealerships can reopen.
“On the AA Cars platform we have seen a 51% increase in car views in May compared to April, and a 46% increase in car finance requests over the same period. We are also starting to see growth in searches for city cars which might support the hypothesis that people will be swapping public transport for a car for their commute,” he explained.
Louise Wallis, head of the National Association of Motor Auctions (NAMA), added: “Q1 2020 started strongly for auctions, and would likely have continued without the Covid-19 crisis.
“Auctions are now operating, although with reduced volumes to normal, which is giving much needed assistance to the market.
“We anticipate this volume to continue to rise over the coming months as the market gradually returns to more normal trading conditions as the lockdown starts to be lifted.
“Dealership reopening will be critical to kick start the used car market as they will need to buy stock for their forecourts to fulfil customer purchases and use auctions to dispose of any surplus part-exchange vehicles”.
Reflecting trends in the new car market, superminis remained the most popular used buy, with 610,859 transactions, equating to 33.0% of the market but almost all segments saw a fall in demand, apart from dual purpose, which rose 2.7% with just over a quarter of a million finding new owners. Black remained the most popular colour choice with 394,177 units sold, followed by silver/aluminium, blue, grey and white. The only car colour to see a rise in demand was bronze, which saw an increase of 1.6%.