The Gavel - August 2020
Wholesale market opinion from our resident auction expert, Andy Conde.
Andy Conde - Cars
The re-starting of our auction programme two months ago saw a frenzy of online buying activity with pent up demand and a shortage of stock combining to send prices rocketing.
Now the dust has settled and we can see the start of some form of normality returning to the job with a steadying of the market.
Make no mistake, demand for quality used vehicles is a strong as ever, beyond anything an auctioneer like myself could have hoped for. But it’s become clear that the apparent desperation for stock has tapered off with a move away from buyers bidding on poorer quality vehicles that require refurbishment. Vendors who are selling Grade 4 vehicles and upwards would do well to consider this shift in demand when setting reserves. Likewise, auctioneers should consider this when taking bids.
Those that work in our industry all expected to see a market correction at some point so it’s no surprise to see a slight levelling of prices. In the days and weeks that followed our re-opening, dealers were able to make large profits at retail due to the sheer consumer demand. Part-ex vehicles were flowing in and dealers could capitalise on this pent-up demand by offering relatively low prices for consumer’s old cars.
Now two months on, consumers have become savvier and retailers are having to offer more for the part-exchange. With auction volumes increasing, dealers now have a greater choice of stock and can be more conservative about what they buy.
Still, whilst consumer demand remains high competition at auction will remain strong. Vendors need to be cashing in on at least the first or second bids received to capitalise on this demand and as a result we expect the volume of auction re-entries to remain low.
Last month I spoke about the considerable increase in demand and prices for specific vehicles. However, as the market as whole shows signs of starting to level out, certain makes and models continue to outperform all expectations. High-spec vehicles such as the Range Rover Sport will still fetch higher than normal prices well in excess of Cap Clean. But I must say that our colleagues at cap hpi have judged the market perfectly and the decision not to alter the book prices in August is spot on.
As we move into August, buyer attendance remains strong as I expect to see numbers grow even more with confidence in using our online bidding technology growing day by day. The market is showing signs of levelling out, but for now I don’t believe these changes will be significant. Expect to see vendors remain positive and setting sensible prices whilst buyers continue to see healthy retail levels. If that happens, then it will be another successful month for all.