Demand for used cars in the wholesale market is levelling off in the wake of the initial surge experienced following the lockdown.
That’s the view of Cox Automotive which said values remain strong, but it expected values of older and poor condition cars to reduce.
In the used wholesale market, demand shows signs of levelling off with retailers being more selective as the initial pent-up demand seen in between June and August slows down, according to Philip Nothard, Cox Automotive customer insight and strategy director.
Nothard added: “Used car values remain strong, with just a slight fall after the abnormal rise in values witnessed during August.
“Used car prices remain healthy following a rise of 3.9 indexed points, as supply aligns with demand. We saw that supply returned to mid-July volumes in August, which is an increase of 18.2 indexed points from the post-lockdown low. However, we expect to see supply volumes rising faster, especially given the significance of the September market to dealers.
“Furthermore, reduced demand for poor conditioned used vehicles continues to weaken values within the wholesale arena, and we are expecting the prices of 10-year+ cars to reduce.
“It is also encouraging to see the response within the trade to our online auctions at Manheim, which continue to offer customers buying efficiencies and multi-sale opportunities. September and Q4 will be a critical period for the used car market. The threat of new regional lockdowns by the UK Government will cause more concern within the industry.
“However, with all the new COVID-secure procedures now in place, we are hopeful that the industry can remain open for business. I am expecting many dealers to remain cautious in Q4 though.”