At the start of the year, we picked out the top used car sales trends to watch – in short, how people were buying, and how dealers could use these habits to stay ahead of the game.
As 2021 comes to a close, it’s the perfect time to see if these trends were a flash in the pan or whether they’re still burning bright. Let’s jump in!
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Drivers eye up affordability
The trend:
Drivers set their sights on affordability in early 2021, making used cars the order of the day. This shift in focus was timely for dealers, as the shortage in new vehicles was already making itself felt. We expected this consumer trend to continue throughout 2021 – so, did it?
Where are we now?
We were getting ready to eat our words over the summer – with COVID-19 restrictions lifting leading to high hopes for increased consumer spending. However, autumn arrived, and with it fuel shortages, rising inflation and the prospect of higher interest rates – impacting consumer confidence.
Although thrifty customers go hand-in-hand with the used car market, 2021 then threw another curveball for buyers – with the stock shortage causing used car prices to increase. The focus for dealers, then, is striking the balance between finding stock that brings the best margins, with an RRP that still attracts customers. We might just be able to help with that!
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The flight from public transport
The trend:
Summer 2020 saw a ‘mini boom’ in used car sales – partially driven by concerns over the risk of COVID-19 spreading on trains and buses. At the time of writing our trends blog, we were in the midst of lockdown 3, and were speculating whether more public transport commuters would turn to cars over the long term.
Where are we now?
The trend was still going strong in June this year – in fact, 20% dealers told us that their buyers were motivated by wanting to move away from public transport. This continues to present an opportunity for dealers, but it’s not one that will last for ever, as it’s likely that many of the concerned train-and-bus commuters have already jumped ship. What are you finding at your dealership?
A trend that will last, though, is the shift in the ‘value’ of having a car. Customers are becoming drawn towards brands that reflect their lifestyle – so this is a brilliant chance for used car dealers to promote the freedom that comes with owning a vehicle, rather than the ‘hard sell’.
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Young money
The trend:
Young people have also been rethinking how they travel – in autumn 2020, Auto Trader had reported a sharp year-on-year increase of 18-to-24-year-olds looking at cars on their website.
Where are we now?
This interest from younger audiences appears to be continuing. Direct Line estimates that around 1.3 million drivers will earn their licence between the beginning of April 2021 and the end of March 2022 – due to the huge backlog of drivers waiting to take their test post-pandemic.
Plus, with 18-to-24-year-olds being more likely to purchase a used car that’s more than five years old, this trend continues to be food for thought for dealers, who are looking to diversify their stock.
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The digital opportunity
The trend:
Digital retailing and ‘virtual’ services have accelerated, with dealers rolling out sophisticated e-commerce platforms to give buyers more confidence in buying cars from the comfort of their home. In early 2021, AutoTrader found 41% of people are now comfortable buying a car online, rising to 61% once the online sale process is described in detail.
Where are we now?
Interestingly, Keyloop recently found that more than three quarters of consumers still want to see a used car in person before they commit to buying it. It’s all about improving the digital journey to either encourage people to buy online, or come along to the showroom.
Providing detailed information, accurate condition reports and high-quality imagery/videos will help drive buyers to your forecourt. Are you still seeing a high volume of digital used car sales since restrictions ended?
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Used cars: already ‘on the up’?
The trend:
Pre-Covid, there were already signs of the used car market picking up, after three years of decline. Indeed, the SMMT had reported the strongest performances in November and December 2019 since the same months in 2016.
Where are we now?
It’s safe to say that 2019 feels like a *long* time ago, and whether the used car market was already ‘on the up’, the pandemic has certainly sharpened the focus. In Q2 2021, the UK used car market saw its second-best quarter on record. That said, there’s still a road ahead to ‘normality’ – used car sales declined 6.2% in Q3 as vehicle supply shortages continued to have an impact.
As we can see, the above trends are still going strong (albeit some with limited mileage) – so it will be interesting to see which continue to play out. At the time of writing the original blog, the used car market was a spark of hope for the industry – it’s still the case, yet now the stock challenges have proven to be a test of their own.
Understanding buyers’ motivations and using real-time market data is therefore key in equipping dealers to jump on new opportunities. It’s vital to stock up quickly, and at Dealer Auction, you have 24/7 access to ‘buy it now’ and timed auctions, helping you get fresh stock on your forecourt in a matter of days.
Stay tuned for the retail trends we expect to drive the used car industry in 2022…
