The near-prime motor finance specialist says that the market has remained relatively resilient during lockdown so far and that there are reasons for optimism.

Paul Burgess, CEO, said: “As expected, this has been a tough period for used dealers but one where the vast majority have managed to continue to sell cars on a consistent basis, if in reduced volumes.

“Our feeling is that, in general, dealers are now pretty good at operating online click and collect models and have done a little bit better than they expected at the start of the latest lockdown. Most, from our conversations, appear to be relatively optimistic about what trading could be like when conditions are relaxed.

“It’s definitely an odd market in which we find ourselves, which is shown in the way that prices have continued to rise. That couldn’t happen in a market that was doing very badly, even though the situation is obviously deeply compromised.”

He added that, in terms of the year as a whole, much depended on whether there was pent-up demand in the market that would be released when lockdown ended.

“This seems to be a question about which there is a quite a lot of discussion and disagreement in the market, and we are hearing many different views on this point.

“However, whether or not there are a group of buyers waiting to walk back into showroom, what seems clear to us is that the key factors that have powered the market through the whole of the pandemic period – people who have disposable income spending it and people moving out of public transport into cars – are likely to continue into the medium term.

“Certainly, we are continuing to see applications at a rate that we would describe as relatively buoyant given the conditions and, in our view, 2021 could be a stronger than expected year.

“While showrooms are not going to open until later than some dealers had hoped, the fact that we now have a timetable for the relaxation of lockdowns is a positive development. That will allow the industry to make plans for the rest of the year with relative certainty.”

However, Paul added that there remained considerable downside risks that were difficult to assess, so the situation remained far from certain.

“Probably the single biggest issue is what will happen when furloughing ends, whenever that turns out to be. Hopefully, the Government will look at ways to taper this in order to soften the impact over time and we may even hear something in the Budget.

“The danger is that unfurloughing prompts a sudden increase in job losses at a time when unemployment is already high and, as well as the human price, that is likely to have a genuine impact on consumer confidence.”