How has coronavirus impacted the used car market?
Wednesday, 3 June 2020
The COVID-19 pandemic has had a noticeable affect on most industries, including the sale of used cars. According to Fleet News, used car values fell by 2.2% in March, as retail and trade demand became influenced by the Coronavirus crisis.
There was a further, more dramatic effect on used car prices from 16th March as demand fell; the number of cars sold on Friday 20th March was 23% lower than on 6th March and 19% lower than on 13th March. Cap HPI, experts in automotive data were confident that values would likely continue to fall, as the UK went into lockdown and fewer people required transport due to furlough schemes coming into play.
Car dealerships are now able to re-open for business from 1st June, with people able to return to work where possible, too, in certain areas of business. This is likely to push demand for vehicles up a little, especially as people are advised to not take public transport if they can avoid it. A used car is a cheaper alternative to new, which could help used car dealerships to promote themselves as the safe and affordable option.
ASM Statement on Business Operations
Whilst the COVID-19 situation has serious implications for most businesses, and indeed society in general, we believe that ASM Auto Recycling is well positioned to weather the current economic storm and continues to provide its customers (both trade & public) with a supply of guaranteed green (recycled) car parts.
We are able to supply green/recycled car parts for most makes and models, and often up to 80% cheaper than main dealer prices. However, not only are there economic benefits to customers from purchasing green parts, there are also significant environmental and ethical benefits. Used car parts are now referred to as ‘green’ because they often save a car from being written-off in the case of an accident and also prevents a new part from having to be manufactured. The use of green car parts is, in fact, better than recycling itself, as it not only reduces the demand for precious resources, it also reduces the amount of plastic and metal that we actually throw away… whilst at the same time giving new purpose to perfectly good parts that would otherwise be discarded!
With customers becoming far more environmentally aware and choosing vehicles that reduce the impact on the environment, I think we will also see an increased demand for car parts that also achieve the same goal… and the financial savings are just the icing on the cake.
Outlook for the rest of the year
Since the Coronavirus lockdown measures were introduced in late March, new car sales slowed dramatically in the UK. As restrictions are now being gradually eased around the country, with the government’s proposed phased plan, it has been confirmed that car dealerships in England will be allowed to reopen from 1st June. But what about the used car market? Autovista Group has reported that the used-car markets have “proven more resilient”, with year-on-year declines of 34% in France and 62% in Italy for March, compared to downturns of 72% and 85% respectively in new-car registrations.
Speaking about the rest of the year, Neil King, Autovista’s senior data journalist suggests: “the economic situation will likely lead many consumers to tighten their belts and seek out used cars instead of new, as they represent better value for money. The production stoppages and considered approach to restarting manufacturing will also constrain the supply of new cars, including demonstrator examples, and this could also help the RVs (residual value) of young used cars.”
With the rise of redundancies and furlough schemes affecting many of the population, money will be a consideration for people when it comes to all purposes, but especially larger ones such as a car. For the remainder of 2020, it is likely that if people purchase a vehicle at all, it will be a used one.
Online car sales
The Department for Business, Energy & Industrial Strategy (BEIS) has officially confirmed that dealers can continue to sell cars online as long as social distancing rules are followed during the delivery and handover of vehicles. Dealers will also be allowed to operate a click & collect service to minimise contact.
Get in touch with ASM
ASM Auto Recycling can supply almost any used car part for any vehicle – and to anywhere in the world! We currently stock over 100,000 guaranteed recycled car parts in our used car parts department. From used tyres to green car parts, we can help. Head to our blog to see more about buying used car parts and entire vehicles.
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