Used car sales drop in Q1 as online platforms drive lockdown demand

Used car sales in the UK declined 8.9% in the first quarter of 2021, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).

A total of 1,687,755 transactions took place in the first three months of the year, with the overall decline driven by large falls in January and February – down 27.1% and 19.4% respectively. March saw the market show signs of recovery, with a 32.2% rise year-on-year, although this compares with a weak month in 2020. 

With dealerships closed due to lockdown measures throughout Q1, these declines could have been worse, had it not been for the rise of online used-car platforms. Comparing figures to last year does not give a true picture of the market, but when compared to 2019, sales fared worse, down 16.5%, or 332,389 fewer transactions.

However, as the start of this year was impacted by COVID-19 lockdowns, and with dealerships now open, figures should improve across the rest of the year. This is especially true for Q2, which will compare to April, May and June 2020 – when car showrooms closed and online sales were not yet trusted by the public, if platforms were able to handle the high number of transactions required at all. 

Breaking the fuel types

Demand for used battery electric (BEV), plug-in hybrid (PHEV) and hybrid vehicles remained strong in Q1. Buyers were keen to purchase pre-owned ultra-low and zero-emissions cars, helped by increased availability and more models available. Hybrid transactions rose 16.6% to 27,694 units while PHEVs saw a 32.1% uplift to 10,534 units, and BEVs surged 48.3% to 6,564 sales.

However, the combined number of plug-in vehicles (BEV and PHEV) traded still represented only 1% of the market, up from 0.7% in Q1 2020. This illustrates the scale of the challenge ahead to transition the entire used car arena away from traditional fuels. Petrol and diesel powertrains combined represented 97.1% of all first quarter activity at 1,638,536 units.

Luxury saloons and specialist sports were the only segments to see growth, up 10.3% and 5.4% respectively, with transactions in the mini segment falling the most, down 18.3%. Superminis (31.4% share) were by far the most popular used buy, followed by lower medium (27.2%) and dual purpose (13.1%). Together these accounted for more than seven in 10 (71.7%) of all cars finding new owners. 

Black was the number one colour choice, with almost 370,000 transactions, followed by silver/aluminium and blue, while at the other end of the spectrum, 981 pink cars changed hands.

“These figures lay bare the turbulent impact of coronavirus lockdowns on the used car market and, while March’s performance suggests there is some pent-up demand, this is against a weak month last year, so its true extent remains to be seen,” commented Mike Hawes, SMMT chief executive. 

“The second quarter will see significant growth as last year’s April and May markets were severely limited by lockdown measures. It’s vital that the used market is rejuvenated to help sustain jobs and livelihoods, drive fleet renewal and support environmental progress. With car showrooms open again and the UK coming out of Covid restrictions, the sector can look forward with renewed optimism.”

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