Drivers to spend more on their next car than previously planned
Buying data indicates that once lockdown ends, motorists are set to spend more money on their next car than previously planned
Drivers are set to spend more money on their next cars than they planned before the coronavirus lockdown came into effect.
In April 2020, the average price paid for a car on online motor retailer BuyaCar.co.uk fell to a three-year low of £11,366, having dropped from £13,590 in April 2019. The first week of May 2020 saw the average price of a car on the site reserved for future purchase rise to nearly £16,000, however.
BuyaCar, an Auto Express sister site, says the rise has come in spite of an increased number of more affordable cars being available on the platform. The retailer’s analysts believe reduced car sales caused by the lockdown have created both a pent-up demand, and a stronger desire among buyers to spend more money on their next car purchase.
The Mercedes A-Class, Volkswagen Golf and Mercedes C-Class are currently the three most in-demand cars on BuyaCar. This contrasts what was happening during the height of the coronavirus crisis, when those who were looking to replace their cars at the lowest possible cost.
The price difference between the models buyers initially looked and the cheaper ones they ended up buying was £488 in February, with that deficit rising to almost £1,000 in March, and £1,745 in April, with BuyaCar saying keyworkers in particular were replacing their cars for essential reasons.
Andy Oldham, chief executive of BuyaCar, 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 restart. Our own website traffic reveals a 71 per cent 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.”
BuyaCar pledges to continue prioritising NHS staff and key workers
BuyaCar has said it will continue prioritising NHS staff and key workers in its operations, even if that means selling cars to them at a loss.
Although normal trading has slowed for the digital motor retailer due to the coronavirus pandemic - as has been the case with many businesses in the motor industry and beyond - BuyaCar has recently delivered cars to 27 key workers, 18 of whom are health professionals. The other nine include food supply workers, police and armed forces personnel, as well as a prison officer.
In one instance, a car was transported 283 miles from Newcastle to London to be delivered to a consultant anaesthetist. The average delivery distance for all of the 27 cars, though, was 206 miles.
BuyaCar is currently reviewing operations to guarantee its car deliveries don't put its employees or customers at risk. It announced last week that it had axed delivery charges, and implemented a 'contactless handover' system where employees and customers don't come into direct contact during deliveries. In addition, the firm is donating a free two-year warranty to any new customers who the Government classes as a key worker.
This offer is worth almost £700 per car and means BuyaCar is temporarily selling cars at a loss. However, the company intends to continue operations in spite of this, as long as stocks remain at the necessary levels and no one is put at risk during the process. It's hoped stock won't prove an issue - BuyaCar acquired 13,500 additional cars this week for customers to purchase.
Andy Oldham said: “Like any responsible business we constantly review the feasibility of continuing to trade during this crisis and we remain determined to do what we can to help in the fight.
“Many dealers continue to maintain their behind-the-scenes operations. As long as we are able to maintain reliable supplies of cars from them, help customers to finance them and receive them cleanly and safely, we will do so.
“For the moment our guiding principle is that essential workers don't just want a new car - they often need a new car and our mission is to do whatever we can for those people until the coronavirus crisis is under control.”
Visit our sister site Buyacar.co.uk for the best way to lease your next car