10 Mar 2021
Signs of a degree of post-lockdown, pent-up used car demand are now beginning to become apparent, Startline Motor Finance is reporting.
The near-prime motor finance specialist says that it has seen a very busy February and March-to-date and is receiving feedback that customers are buying cars ready for the summer or to collect once showrooms reopen.
Paul Burgess, CEO, said: “We’re not talking about a dam burst of demand suddenly being unleashed in the market or perhaps even the kind of sudden, strong demand that we saw last summer but there’s a detectable sense of the market just starting to rev up.
“What is probably happening is that there is a general sense of optimism as the vaccination programme rolls out relatively quickly and a gradual return to some kind of normality looks to be in reach. This inevitably feeds through into increased consumer confidence which is a major influence on used car sales.
“We’ve already predicted that we believe 2021 could be a better year than many imagined just a few weeks ago and that situation seems to be developing.”
Paul said that the market appeared to be powered by the two same categories of buyers that had been apparent since the start of the pandemic.
“For the last year, it has very much been about people whose spending has been reduced by the pandemic channelling that spare money into cars alongside those who absolutely need to buy for work or personal transport needs.
“What is interesting is that there are signs of both these groups increasing in propensity to purchase in a post-lockdown sense. Again, we are not forecasting a massive unleashing of demand but there are enough signs to be optimistic about the Spring and Summer markets.”
Paul said that, if the used car market was to see any kind of downturn, it was likely to take place during Q4 and heading into 2022 when the government withdraws several forms of ongoing economic support.
“We now know that, for example, furloughing will end in September. This is being done in a relatively responsible manner, tapering off over some months, but there will almost certainly be quite a number of jobs lost.
“The truth is that we are in such an unprecedented situation that no-one really knows what will happen at that point. We could see a rebound of the economy, a sudden loss of consumer confidence, or both.
“However, what has become abundantly clear over the last year is that the used car market is incredibly resilient and, for that reason, we remain confident that it will continue to perform ahead of expectations.”