Data from CDL Vehicle Information Services (VIS), which powers mycarcheck.com, showed a collapse in used car sales following lockdown, with vehicle transactional data records 89% down in April compared to March – similar to the impact on sales of new cars.
Vehicle valuations were frozen on 23 March, but this looks set to move next month, according to Head of Vehicle Valuation Services at CDL VIS, Jon Wheeler.
“Although it’s still very early days, we are already seeing the first transactions coming through, led by online auction houses, and we expect pricing movements to kick in over the coming weeks, driven by pent-up demand.”
The vehicle valuation team has been closely monitoring the automotive marketplace for Covid-19 related impact, working closely with industry contacts across the manufacturing, banking, retail and leasing sectors, and providing consultancy and support through the crisis. It sees a number of factors set to stimulate demand.
“Fears surrounding public transport, the drop in fuel prices, increased home-working and growing environmental awareness all point to the likelihood of greater demand for small city vehicles and electric vehicles as people use their cars more selectively.
“We also anticipate an increase in secondary leasing of used vehicles, due to the interruption to supply of new cars, which is likely to give consumers some lower cost leasing options in the short-term.
“As long as dealers can provide consumers with reassurance that they have adapted their operations to be ‘covid-secure’, with frictionless purchase, payment and delivery options for consumers, it’s likely that we’ll see new opportunities and trends emerging.”
The DVLA has already changed its rules to allow for unaccompanied test drives and the market is preparing to offer home visits and adapt to the requirements of social distancing.
Jon adds: “Like the rest of the country, the motor trade is adapting to the challenges ahead. We had seen strong growth in the first quarter of 2020, and the signs are that things will start to pick up again.”
CDL VIS data shows that used car values rose 2.9% in January 2020, 4% in February and 3% up to mid-March, before seeing a fall of -1.9% approaching lockdown; at this point, vehicle valuations were frozen.