UK auction companies and residual value specialists have reported an extraordinarily strong period for used car values, much of which has been credited to a widespread lack of new cars caused by the global semiconductor shortage.
Cox Automotive, which owns auction firm Manheim, said its average wholesale used car prices were £5,770 – up £554 and 10.62% on the same period in 2019, the equivalent, non-pandemic trading period. First-time conversion rates increased by 6%.
“While these results are positive for the wholesale sector, it’s important to remember this comes as a consequence of challenges faced in the new vehicle market and the continuation of a limited supply of used retail vehicles entering the wholesale market,” said insight and strategy director, Philip Nothard, “retail-ready stock is in the highest demand, but also seeing the biggest supply issues.”
Online auction firm Autorola noted similarly strong results in its Indicata Market Watch report. It said used car sales in April were “the strongest of any month during the pandemic” and that volumes of hybrid and petrol used cars rose by 30% and 23% respectively.
It added that the used car market was stronger in April than it had been during summer 2020, when it rebounded after the UK’s first lockdown.
Its fastest-selling used car up to four years old was the Volvo XC40 with a stock turn of 18.4, which equates to just under 20 days to sell. Second was the Vauxhall Mokka X at 17.6 – also said to be Europe’s fastest selling used car – and the Vauxhall Zafira at 17.4.
“April was a record sales month, but already the pressure on supply is starting to show which is, in turn, forcing prices upwards,” said Indicata’s sales director, Jon Mitchell (pictured above).
“A shortage of semiconductors is already affecting new car sales so we predict used prices will continue to rise… [and] we could be witnessing these market conditions throughout the summer months until the new car production challenges are resolved,”
Valuation specialist Glass’s also chimed in, with forecast editor Robert Redman saying there were, “more cars sold first-time and for more money”.
“The used car auction market is continuing to improve,” he added, “strong demand is continuing to drive values up, and whilst this is undoubtedly good news, dealers should be cautious. With many retailers topping up their sites to pre-lockdown stock levels whilst also keeping up with the increased demand, values may over recover.”
