Confident market performance as used car sales approach typical trading levels
According to the latest data from Auto Trader, most retailers are now trading at around 90%[1] of typical volumes. It marks a notable increase on the circa 80% recorded in February, and circa 60-70% levels in January.
This continued acceleration in sales is reflected on Auto Trader, which during the first week of March (1st – 7th March) saw a step-up in audience performance with 15.5 million cross platform visits: an increase of 5% week-on-week. It’s now more accurate to compare the current performance against 2019 given the emerging impact of COVID-19 this time last year. Accordingly, visits during the first week of March were up 24% on the same period two years ago.
What’s more, advert views increased 21% on 2019. This strong level of consumer engagement resulted in a circa 108% increase in the number of leads[2] being sent to retailers, when compared with the first week of March 2019.
Serving as a further indication of the potential health of the market, an onsite survey conducted in February revealed that consumers' confidence in being able to afford their next car was at its highest level (8.75/10) since Auto Trader began tracking it in January 2020, surpassing the previous peak recorded in January (8.60/10) of this year. It’s even ahead of confidence levels recorded pre-pandemic (8.11/10 in January 2020). What’s more, 48% of those surveyed said they were more confident than they were a year ago, up from 45% in January 2021. This supports predictions that there may be a surge in retail spending from consumers when retailer forecourts fully re-open across the UK.
Test drives don’t guarantee a barrier to online sales
Whilst the acceleration in sales volumes is clear evidence of the huge uptake in digital retail amongst car buyers, one of the perceived barriers to remote selling is not being able to offer a test-drive. Indeed, in a separate onsite study conducted last week, when offered a 14-day money back guarantee, nearly two thirds (65%) of consumers would commit to a purchase without a test drive. This is despite 68% of the more than 2,700 consumers surveyed saying they would not consider buying a car without a test drive. Nearly a third (31%) said they would consider it, which in itself represents a sizeable potential audience.
The research also highlighted what else would make a consumer more comfortable buying without a test drive, with 64% selecting warranties offered by the dealer, 59% stating clear images of any imperfections, and 49% saying workshop inspection reports.
Commenting on these metrics, Auto Trader’s chief executive officer, Nathan Coe, said: “It’s very encouraging to see the market is approaching typical trading volumes, which is testament to the speed at which retailers have adapted to digital retailing. Automotive retailing is very much open for business as retailers continue to report strong performance despite the restrictions. This continued acceleration in both sales volumes and consumer demand, points to a strong period of retail growth once forecourts are able to fully open.
“What’s vital is that retailers don’t wait until the 12th April to seize the opportunity to convert searches into sales. Unless retailers have their stock and their brands promoted across their digital channels, not only will they miss out on those who are in market to buy today, but also the 59% of those we know are researching in March to buy in April.”
[1] Sales proxy data based on the levels of stock removed from Auto Trader, w/c 22nd February 2021 vs w/c 24th February 2020
[2] Leads are categorised as email, part exchange enquiries, finance enquiries, texts and chats.
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