How has Covid-19 affected 2020 car sales?
Buy a new car after lockdown with help from Logbook Loans...
Car sales is one of the many areas on which Covid-19 has had a huge impact. With car factories and dealerships being closed during lockdown, there has been a dramatic fall in the sale of new cars: a 97% reduction in April alone.
Shortly before lockdown we ran an article called So the 20 reg cars are here. But it’s now estimated that the UK’s output of 2020 cars could be reduced by up to 200,000 vehicles due to Covid-19.
But new research indicates that 47% of car owners still plan to replace their car in the next 12 months. So if you have been thinking about changing your car, check out the following information so that you know where things are at and what your best options might be.
Buying a new car
Due to Covid-19, all UK car factories were closed and UK car production fell to its lowest level since World War 2. It could be several months before production resumes fully, so bear in mind that there is likely to be a shortage in the supply of new cars.
Car showrooms re-opened on June 1st, but there will be a backlog of demand. This demand for new cars may also lead to fewer discounts and incentives being available to buyers.
So for all the above reasons, if you definitely want to get a new car now, then make it sooner rather than later. Otherwise you may be in for quite a long wait.
Car showrooms will be complying fully with COVID-19 safety guidelines. But if you don’t really want to visit a showroom, then it’s possible to buy a new car online. Many manufacturers – including Ford, Kia, Vauxhall, Volvo, Hyundai, smart, Peugeot and Mitsubishi – allow you to buy a new car online. You are able to configure the car you want on the manufacturer’s website, and arrange payment. Some companies also enable you to part exchange your old car. Once your new car is ready, it will be delivered to your door.
We are living in uncertain times, and no-one can predict how the next few months will develop. But if you are prepared to wait a little while before buying your new car, it may be that there will be greater choice and better deals available than in these early days of the car industry restarting.
Buying a used car
Another option is to buy a used car, either from trade or privately. It is likely that used car prices will be on a downward trend up to around September. This is due to a wide variety of factors including economic uncertainty, the unstable job market and fears about a second wave of Covid-19.
If you are worried about going to view and test drive a used car, it is possible to buy a used car online from some larger dealer networks.
You can also buy privately online from sites such as Autotrader, eBay and Facebook. Many people are keen to sell, so you may be able to pick up a bargain. Just ensure that you take all the normal precautions to check that the car is in good condition.
If you are buying a used car, it is worth insisting on an MOT, even if the car is eligible for the current 6 month Covid-19 MOT extension. A new MOT will confirm that the car is genuinely in a roadworthy condition. Most garages are now open so it’s possible to get a car MOT’d and also any repairs done as necessary.
Selling a car
If you want to sell your car, be aware that buyers will be looking for a bargain. We have already seen that used car prices are likely to be lower over the next few months, and with many people wanting to sell their car now there will be a lot of competition. So you may not get the price you are hoping for.
The used cars that are likely to sell well are those that are in excellent roadworthy condition and have a recent MOT. Post-pandemic, many people’s finances are tight and they will also be looking for a car with lower running costs. So if your car is in this category then this could help you to have an advantage over other sellers.
But the key thing to consider is why are you selling your car? If you really don’t need it any more then that makes sense, but if it is primarily to raise some quick funds then take a look at our article Stuck for cash? Stop! Don’t sell your car! to see what other options might also be worth considering.
We hope that the above information can help you to decide if and when to change your car, and to start to enjoy driving again in “the new normal”.
Check back here soon for more motoring and financial tips from Logbook Loans.