Data from the online car marketplace BuyaCar.co.uk reveals that the average price of cars being reserved for purchase when lockdown is eased has shot up to a record level.
Average prices paid on BuyaCar.co.uk fell to a three-year low of £11,366 during April this year – down from £13,590 paid during April 2019. But the first week in May has seen the average price of a car reserved for future delivery rocket to nearly £16,000.
Analysts at Buyacar.co.uk point out that this is despite an increase in the proportion of cheaper ‘budget’ cars available on the site. They are now speculating that enforced slowing of car-buying activity since March has created not only pent-up demand but a stronger consumer appetite to splash out on a better car than they originally planned to buy.
IE Comment; Let’s do the maths behind this; If you don’t have to put £1200 worth of fuel in over a year to fund commuting, but something closer to say £500, that frees up some cash. Less annual miles means cheaper insurance, say £50 on the average policy. Then there’s the old VED tax band racket – a new fuel-sipping car may well be rated at under £120 a year, as opposed to £320 for an older model. Now factor in some £1000 saved over the last seven weeks by NOT going out socialising, cinema, haircuts, nails, buying stuff you didn’t really want anyway etc.
Yep, you can see where the extra cash has magically appeared from. Plus thousands of small companies now have an extra 10K on their balance sheet, so there’s that too.
BuyaCar has continued to deliver cars during the Covid-19 pandemic but restricted its sales to key workers, tradespeople and those for whom a car is essential to looking after their family or vulnerable people. But the data released this week relates to cars reserved on BuyaCar.co.uk in recent days which will be delivered after restrictions are eased.
Topping the list of cars most in demand on BuyaCar.co.uk are Mercedes A-Class, Volkswagen Golf and Mercedes C-Class, suggesting that consumers have their sights set on higher reputation brands.
Motorists’ intentions today are in stark contrast to those essential car buyers who bought during the height of the coronavirus crisis. Their focus on replacing a vehicle at the lowest possible cost was reflected in an unusually big gap between the price of the car they originally chose and the price of the car they actually bought.
In February that gap was just £448, rising in March as the crisis deepened to almost £1,000. But in April, as key workers in particular, such as NHS staff, made strictly essential purchases the difference between what they originally chose and actually bought was a record £1,745.
Andy Oldham, Chief Executive of BuyaCar.co.uk, said: “Our sales and buying intentions data reveals a fascinating picture of the car market at its most distressed and suggests that there is going to be a surge in spending when the market begins to recover.
“The value of our contribution to keeping key workers mobile by offering them free delivery and a free warranty is demonstrated by how careful those people have been in their buying choices. I am delighted that with the help of our supplying dealer partners who managed to safely continue their support for us, we have made a real difference.
“Now, looking to the future it seems that consumers who have been kept out of the market for some time have a stronger appetite than ever for securing the best car they can afford.
“It seems that car sales in general are heading toward a very busy re-start. Our own website traffic reveals a 71% bounce back from the depths of early in the lockdown and we look forward to being able to resume our normal service as soon as we get the green light.”