The used car market in the UK saw sales decline by almost half (48.9%) year-on-year in the second quarter of 2020, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). The pace of decline eased as the quarter progressed, from a peak year on year loss of 74.2% in April to -17.5% in June, as private sellers and buyers got back on the move and transactions began to restart. However, the SMMT said it is unclear how long it will take for the market to recover given economic uncertainties and a need for greater activity in the new market to drive fresh stock. Demand for pre-owned battery electric vehicles, which grew by 44.8% in the first quarter of 2020, declined in the second quarter, falling by 29.7% year-on-year to 2,288 units. Their market share remained stable at 0.2%.
At the same time, sales of plug-in hybrids dropped 56.3%, with just 3,249 changing hands. Meanwhile, petrol and diesel car transactions decreased by 49.2% and 48.5% respectively, although combined they still accounted for 98.3% of sales in the quarter, equivalent to 1,021,963 units. Despite a fall of 52.4%, superminis remained the most popular used buy with 316,570 finding new owners in Q2, representing 30.5% of the market.
All segments saw a decline with luxury saloons faring best with a slightly more modest -30.4% decrease. Black remained the most popular colour choice with 227,660 units sold, closely followed by silver/aluminium, blue, grey and white. In the first six months of 2020, used car transactions were down by 28.7%, with 2.89m units changing hands. The second quarter represented more than 85% of the 1.16m lost sales so far this year. (Please see linked for industry comment)
By 2025 more than 350,000 homes across the UK will be fitted with an electric home charging system, according to Andersen, a British manufacturer and installer of high-end home-charging points. Analysis of sales trends by Andersen has found that 362,270 wall boxes could be installed in UK driveways and garages over the next five years, based on current installation rates, adding to the current crop of 120,000. Andersen is predicting 2020 to be a tipping point for electric vehicle uptake, following January sales that were four times as high as the same period last year.
Jerome Faissat, CEO of Andersen, said: “At Andersen, we’re in no doubt that electric vehicles are the future. As we move towards a ‘new normal’ in the wake of the coronavirus, we’ve seen clear evidence that people want to change their habits so that they can move forward in a way that is more mindful. Over the past three months, pollution has fallen in our cities and we’ve enjoyed the cleanest air we’ve had in decades, and it’s inspired many to rethink the way they get around. We’re seeing people vote with their feet – as they make the switch to an electric car, bike or scooter. “Going electric is more than an ethical choice. It’s a choice to embrace the future. Our message is clear: If we work together, we can help encourage take up of electric vehicles and make our communities cleaner and safer.”
Over seven million motorists in 2019 risked a £1,000 fine by missing their MOT renewal, according to new data. Of these drivers, 81 per cent renewed within three months of their expiry date, with MOTs expiring in May the least likely to be renewed on time. Insurance comparison site MoneySupermarket analysed data from the DVSA, DVLA and Department of Transport, and also found that 634,000 untaxed vehicles were on the road last year.
- London - 47,642
- East of England - 22,164
- North West - 19,555
Meanwhile, 2.3 million UK adults were driving without a valid licence, having not updated them to their latest details. Each of these offences also risk a fine of up to £1,000. In 2019, there were a total of 160,000 fines issued for driving licence, insurance and record keeping offences, with London seeing the highest number of fines with almost 30 per cent of infringements. The north-east saw the fewest fines, representing just two per cent of the UK total. Dave Merrick, car insurance spokesperson for MoneySuperMarket, said: “It can be easy to forget things like MOT, insurance or tax. We encourage everyone to keep track of their renewal days, and actively set reminders if you need a little help.”
View the original research here
The Government has confirmed it will introduce new type approval regulations based on those developed by the EU, following the UK’s exit from the EU. Its decision follows a 28-day consultation period, to which 25 responses were received. The EU transition period ends on December 31 2020. After this, EU law on vehicle type approval will no longer have direct effect in GB, although it will still apply in Northern Ireland. Initially, the GB type approval scheme will be based on the EU scheme because the EU (Withdrawal) Act 2018 converts EU Regulations on type approval into Retained GB legislation on January 1 2021.
Manufacturers who are not already in possession of GB whole vehicle approvals will need to apply to VCA before January 1 2021, providing details of their EU type approval, and they will be issued with what is being termed a ‘provisional’ GB type approval by VCA. A number of important measures were introduced in Regulation (EU) 2018/858, which gives the Vehicle Certification Agency and the DVSA enhanced powers of scrutiny over manufacturers and test agencies.
Deadlines are also set for the sell-off of tyres which do not meet the requirements on wet grip, rolling resistance and rolling noise. These deadlines are 30 months after the dates specified for the last fitment of such tyres to new vehicles and last manufacture of such tyres. Sale of such a tyre was not previously an offence in the UK, but will now be an offence subject to the penalties set out in the regulations. The regulation also contains a requirement that where new passenger vehicles (cars and buses) are fitted with a radio, that radio must be capable of receiving digital radio stations, in line with the European Electronic Communications Code. This is not part of the type approval system but simply applies to all new passenger vehicles placed on the market after December 21 2020.
Used car prices dropped just £22 on average across the whole of the market in the first week of August. Used car pricing experts Cazana have noted there were fewer used car buyers in the market but demand was still strong, keeping prices buoyant. The valuations experts reports that prices dropped just 0.13 per cent in the week – taken from the average of advertised retail used car prices. Cazana director of insights Rupert Pontin said the start of the holiday season and the good weather has seen enquiries drop at car dealers – but said that is ‘hardly surprising’.
He added: ‘The first week of August saw a marginal shift in the retail market with footfall at the retailers and online enquiries slightly down on the levels of recent weeks. This is hardly surprising given it is the holiday season and secondly the improvement in the weather, that looks set to continue throughout the month, has given consumers the incentive to spend a little time on holiday rather than staying at home.’
Used car prices have been climbing since lockdown as a combination of high demand, little stock and consumers looking to avoid public transport buy a used vehicle instead. However, Cazana says this marginal drop in prices – albeit small – needs to be noted by dealer groups as it may signal the start of a trend. Pontin said: ‘While this drop-in price is hardly noticeable in some people’s eyes, across a retailer group this dip would have made a costly difference. This should also serve as a market yardstick and one that should be watched closely going forward to avoid financial challenges as the market shifts as is expected later in the year.’
Cox Automotive’s monthly Dealer Sentiment Survey has found that more than a third (37%) of UK car dealers are stocking older vehicles in the wake of COVID-19 lockdown. With a shortage of three- to five-year-old cars resulting in part from the transition to new CAFE emissions regulations, compounded by a pause in part-exchanges and fleet renewals due to the pandemic, means that supplies of nearly new vehicles has stalled. In all, 48% of respondents to Cox’s survey said that they expected their stock profile to change in the shorter term, with 46% anticipating that they would be able to maintain a similar forecourt.
Yesterday, Louise Wallis, the head of the National Association of Motor Auctions (NAMA) suggested that newer vehicle stock and increase part-exchanges would start to enter the market now that retailers are back up and running and embracing pent-up demand. Philip Nothard, customer insight and strategy director for Cox Automotive UK, agreed, with an influx of new vehicles also expected in September’s key number plate change month.
Nothard said: “As usual, three to five-year-old stock remains a premium and generally more difficult to source. It is good to see that optimism remains in the industry, and that demand within the used market will continue. We do also expect to see a seasonal flow through to the end of the year.”
The Motor Ombudsman has found that the majority of car owners have taken advantage of the six-month extension announced by the government in March to delay getting an MOT. In a YouGov poll of 765 individuals in Great Britain, who have a car of three or more years of age, and that had an existing MOT certificate expiring between 30th March and 31st July 2020, 56% had exercised their right to prolong taking their vehicle to a garage for the compulsory annual test. Just over a third (36%) stated that they would be organising for the safety assessment to be carried out either before or on the newly-extended due date.
A further one in five (20%) said that they had let the original deadline given to them in 2019 pass, but had used the additional window to get their car’s MOT completed ahead of schedule, rather than waiting until the last possible day. Data provided by the Driver and Vehicle Standards Agency (DVSA), shows that nearly 4.9 million Class 4 MOTs, which includes passenger cars, were conducted between 01st April and 30th June 2020. This represents a decline of more than 50% when compared to the 10.3 million Class 4 tests undertaken in the very same period a year earlier.
Following the recent announcement by government that MOTs would once again become mandatory for cars that needed to be tested from 01st August onwards, the poll showed that this had not driven any sense of urgency amongst consumers to get their MOTs booked if their original certificate had expired.