Strong volumes and rising prices are supporting auction houses following the lockdown, according to the National Association of Motor Auctions (NAMA).
Although physical auctions could reopen on 15 June alongside other non-essential retailers, the majority of auction houses continue to focus on online sales which remain extremely strong.
NAMA members expect the sector to perform well over the coming weeks. In particular, more than 50% of auctioneers who responded to the latest NAMA survey said they expect volumes for 3-year-old and older vehicles to increase through July.
While prices are rising, most auction houses believe the average age of cars as well as average mileages will not experience any major change.
Louise Wallis, Head of NAMA said, “Despite significant external challenges, the motor auction sector is seeing a number of positive trends. Volumes are now almost at pre-lockdown levels and auctioneers are optimistic particularly for vehicles over three years old. As new car sales gradually pick up, the increase in defleeted company cars and part-exchanges will support volumes at auctions which are likely to stay strong.
Louise Wallis mentioned also the NAMA grading scheme which was developed by NAMA to ‘enhance transparency and make it easier for auction buyers to select the vehicles they want to buy’. The scheme has 5 grades that are based on the external condition of a vehicle. The grades are determined on a points system allocated by type and severity of damage. Grades are assessed by inspectors at each auction specifically trained to grade vehicles and working to a strict standard.
“Online sales at auctions remain buoyant with the NAMA vehicle grading scheme* boosting buyers’ confidence and giving them the peace of mind they need to make online purchases. At the same time, the grading scheme is helping sellers accurately value vehicles to ensure high conversion rates”, she added.
Derren Martin, Head of Valuations, UK for cap hpi said, “The speed at which NAMA auctions managed to start to sell large volumes of cars purely online during the COVID-19 lockdown is a great credit to the industry. This allowed vendors to realise much-needed cash for their vehicles and allowed dealers to buy in what became a buoyant market from June onwards.
“Receiving NAMA condition graded sold data on a daily basis has assisted cap hpi in reflecting the strength of prices in the market over this period. Wholesale volumes are now in excess of 95% of what we would class as normal, allowing us to continue to accurately move values, where necessary, in our Live valuation product.
“Older vehicles have performed particularly well since May and we predict a strong used car market to continue for at least a few weeks yet, led as always by the auction companies”.