New figures released by the Society of Motor Manufacturers and Traders (SMMT) have revealed that The UK’s used car market fell by 14.9% in 2020.
In a tough year for the sector, 6,752,959 used car transactions took place, 1,182,146 fewer than in 2019, making 2020 the lowest performing year since 2012.
Despite used car transactions increasing 3.7% in October 2020, a fourth consecutive month of growth, a combination of lockdowns and tougher restrictions across the UK later in the year resulted in declines of 18.3% and 4.2% in November and December respectively.
Mike Hawes, SMMT chief executive, commented:
“These figures are yet more evidence of the significant damage coronavirus has caused the automotive sector. Market growth at the start of the year was welcome but quickly stifled by the first lockdown as showrooms closed across the country, a picture that was repeated with the subsequent lockdowns in November and, indeed, into 2021”.
Alternative fuel vehicles (AFVs) however had an increase of 5.2%, a market share rising to 2.1%, with 144,225 of these models sold during the year. In comparison, used battery electric vehicles (BEVs) transactions only increased by 29.7% to 19,184 units.
The market for hybrids (HEVs) also rose, by 4.7%, while demand for plug-in hybrids (PHEVs) fell by 5%.
Used diesel and petrol car transactions dropped 15.5% and 15.2% respectively. However, when combined these were equivalent to some 6.6 million units sold.
Despite all used car segments seeing declines in 2020, superminis remained the most popular choice with 2.2 million units purchased, accounting for 32% of all transactions.
Lower medium cars were the next most traded, with 1.8 million sales to take 27% market share. Other less impactful declines were seen in luxury saloon (-5.8%), dual purpose (-7.2%) and specialist sports (-8.4%) with a combined 1,084,504 transactions.
Hawes believes “The priority now must be to allow car showrooms to re-open as soon as restrictions are eased”, explaining:
“This will not only help the used market recover, supporting jobs and livelihoods and providing individuals with the personal mobility they need at a time when guidance is against using public or shared transport, but it will also enable the latest and cleanest vehicles to filter through to second owners and keep society moving”.
When it came to the colours of vehicles sold, black was number one, followed by silver, then blue. Grey, which was the top selling new car colour in 2020, only managed fourth place.
Interestingly, brighter colours were popular too with 4,018 pink, 6,510 turquoise and 23,427 gold cars sold over the course of the year.
Data from Heycar shows the most popular styles of vehicle increased in value year on year, with the asking price of estate cars up 10% on average, SUVs up 9% and hatchbacks, the most popular style of all, increasing by 1% on January 2020.
Karen Hilton, chief commercial officer at Heycar, said: “Although the figures show an overall decline in used car transactions, the market was showing signs of growth and positivity towards the end of the year - especially when compared with new car registrations.
“It’s impossible to overstate the importance of this to car dealers after the year all of us have just gone through.
“This clearly demonstrates the strength of the used car market and is a tribute to the dealerships who kept going through the pandemic and lockdowns, ensuring stock was available to those who wanted a change of car.
“It is also interesting to note that demand for used diesel cars is very much on the rise. Between January and December, we recorded a 23.2% increase in searches for diesel cars on the Heycar site, alongside a 22.5% rise in customers looking for petrol vehicles. Electric cars saw a more modest uplift of just 10””.
In terms of auctions for used vehicles, the National Association of Motor Auctions (NAMA) have told their trade body that internal combustion engine vehicle values have remained strong during the recent lockdown.
Motor auctions have continued to operate throughout the Covid lockdowns by going on-line. These auctions are available to customers who want to dispose of stock or to source vehicles to fulfil customer demand. 90% of motor auctions have found that their on-line sales are ‘up considerably’ from this time last year.
NAMA found that 90% of respondents to its survey believe both petrol and diesel values would remain strong or further increase.
Auctioneers say first time conversion rates are performing well, with 67% expecting rates to increase over the next month and 33% expecting them to stay the same.
Louise Wallis, head of NAMA, said: “In line with expectations, petrol and diesel values have remained extremely strong.
“The strong values, coupled with robust conversation rates, demonstrate that there is an appetite for vehicles at auction.
“As consumer confidence remains high, we anticipate there will be significant pent-up demand for stock once lockdown restrictions are eased”.
