News comes amid turmoil in the new car market.
Three quarters of drivers have put off their new car purchases until the relaxation of coronavirus lockdown restrictions, according to new research. A study by car supermarket Motorpoint found 75 percent of the 1,781 people it surveyed decided to delay their purchasing decision until non-essential retail reopened this week.
The news comes as Motorpoint and other car dealers in England and Wales are finally allowed to reopen their showrooms amid the easing of lockdown restrictions. With dealers closed to all but click-and-collect customers during the lockdown, the new car market has suffered from a lack of demand.
According to the Society of Motor Manufacturers and Traders (SMMT), the first two months of 2021 saw sales down by 38 percent compared with the same period last year. During January and February 2020, before the coronavirus lockdown was introduced, almost 229,000 new cars were registered. During the same months in 2021, that figure fell to 141,561.
Recent figures from the Finance and Leasing Association (FLA) back up the industry’s plight, with data showing the car finance market has also suffered. In February, the FLA’s members handed out advances for 29,252 new cars for private customers, down 34 percent on the previous February.
Bearing in mind the fact FLA members finance around 93 percent of all new private car sales, that lack of demand represents a serious dent in new car sales. And the consumer used car finance market didn’t fare much better, with the number of vehicles financed down 25 percent in the second month of 2021.
But the FLA’s director of research and chief economist, Geraldine Kilkelly, was bullish about the future, expressing hope that the market would rebound later in 2021.
“UK lockdown restrictions over the winter months contributed to a fall in consumer car finance new business volumes of just over a quarter,” she said. “As car showrooms re-open and consumer confidence recovers, we expect a strong rebound in demand. The value of annual new business in the consumer car finance market is expected to reach its pre-pandemic level this year.”
And the SMMT was also hopeful of an uptick in demand as dealers re-open. The organisation’s chief executive, Mike Hawes, said he hoped the easing of lockdown would allow “pent-up demand” to be unleashed, providing a much-needed boost to the sector.
“After one of the hardest years in living memory for everyone, reopening showrooms takes the handbrake off,” he said. “With the widest and greenest choice of cars ever seen, unleashing pent up consumer demand can accelerate the industry’s recovery and that of the economy. As the automotive sector counts the cost of £22.2 billion lost in turnover during the pandemic, we hope today marks the start of that recovery, as well as giving consumers ever more choice for their motoring needs.”