Is Used Car Market Stabilising back?

Used Car Market Stabilises As Buyers Return to Pre-Pandemic Purchasing

Secondhand vehicle purchasers have started going back to pre-pandemic buying, while demand for used vans is still strong.

While appearing on Car Dealer Live, the managing director of Close Brothers Motor Finance, Seán Kemple, expressed these thoughts. The Finance firm has joined hands with Auto Trader to get better insights into the market and consumer behaviour.

Kemple says the unpredictable buying conduct we have witnessed in the last two years has begun to even out. However, the same is totally opposite for light commercial vehicles. 

The UK dealers observed a huge financing demand for secondhand and inexpensive models. Similarly, luxury car buyers had also taken an interest in pricey and posh used vehicles to get their hands on their desired models cheaply.

“Those trends aren’t as prominent as they were when the country was coming out of each lockdown,” stated Kemple.

“People couldn't go away on holidays, so they treated themselves with a different vehicle, so we saw our average advance increase significantly. That increase reflected the higher-quality used cars people were purchasing and the used car price index increasing. We’re seeing that plateau now with our average advance staying at a stable amount over the past few months.”

It signifies that buyers are seeking more stability and possibly opting for secondhand models because they cannot have new ones.  

Kemple stated, “It’s still higher than average advances and higher than pre-pandemic, but not the fluctuations we saw after each lockdown.”

It is an entirely opposite state of affairs if we talk about funding for secondhand light commercial vehicles, Kemple added.

Kemple clarified the demand for secondhand vans is going strong because most people still prefer online buying.

“From a light commercial vehicle perspective, we saw those numbers absolutely rocket during the lockdowns. We are still seeing demand there, which is really great for the economy,”’ he expressed.

Kemple also believes the entire UK secondhand vehicle sales could cross the eight million mark this year. This forecast is according to solid last two months for financing institutions. That said, this month is particularly slower owing to an increase in utility bills, an overall rise in the cost of living, and continuously bad conditions in Ukraine.

Close Brother’s Partnership With Auto Trader

Close Brother’s affiliation with Auto Trader would enable them to comprehend better the local inclinations, stock inadequacies, and customer behaviour. The intelligent tool from Auto Trader will help Close Brother's dealers unravel their maximum capacity while purchasing and selling stock.

“We finance a huge number of dealers’ courtyards so that we can find the stock on dealer forecourts,’ clarified Kemple.

“We take Auto Trader’s market-leading data and speak to the dealer to aid the sale of those vehicles –what demand is in the marketplace and how those vehicles should be priced depending on their strategy to either move the vehicles as quickly as possible to release profit or maximise profit over a longer period.”

“That’s just one part of it – the other is also what consumer demand we’re seeing coming through our partner classified sites like Auto Trader. These tell us what’s about to hit the forecourt.”

Kemple expressed that dealerships always want to have key information handy to make crucial decisions.

“If you cast your mind back to 12 to 18 months ago, we were seeing a lot of dealers saying: “I’m not going to pay those prices because I’m afraid of retailing at the prices I’m going to be purchasing at.”

“Having the data to understand what consumers are willing to pay, what price points they’re searching for, allows us to work with a number of those dealers to help them. At one point, we were seeing dealers at 50 per cent of their forecourts because they were too concerned to buy the stock at the prices that we're selling at wholesale.”

The innovative tool will be a ‘value-added service’ for Close Brothers’ dealer associates, stated Kemple. He also believes no one else in the UK market is working at this deepness as his company does.

Kemple says their company has more plans for the future.

Source: CarDealerMagazine

Image: BBC