Most car retailers saw their strongest ever sales month in May, trading around 14% above 2019 volumes, according to the latest Auto Trader figures.
Auto Trader expects the strong levels of demand to continue for much of 2021, with calculations based on the average ownership cycle of a car being extended from 3.5 years to 4.2 years as a result of the pandemic.
With this in mind, Auto Trader said: “If the UK car parc of 35.1m cars had turned at the typical frequency observed over the last 10 years, there would have been circa 10m new and used transactions in 2020, instead of the 8.3 million that took place.”
Catherine Faiers, Auto Trader’s chief operating officer, said: “From early this year, we have seen huge levels of consumer demand on our marketplace, which has accelerated dramatically since the reopening of physical forecourts in April.
“As well as fuelling incredibly strong used car sales performance, it’s also contributed to the very sharp uptick in prices, currently at a record 9.7% year-on-year and increased the speed of sale to just 22 days. This trend has led to robust margins and helped to compensate for the lower volume of transactions last year.”
A survey from Auto Trader also revealed that three in 10 consumers see car ownership as more important to them now than it was before the pandemic – particularly so in younger demographics.
Catherine concluded: “With the level of disposable income and savings many consumers now have, it seems reasonable that a significant proportion of the 1.7m new and used car transactions that didn’t occur in 2020, will happen in 2021.
“We believe that we’ve barely scratched the surface of this year’s potential. While this is of course subject to the continued easing of lockdown restrictions and available vehicle supply, it does highlight the huge opportunities available over the months ahead.”