Deutsche Automobil Treuhand GmbH has analyzed facts about the used car market in the current 2021 DAT Report. The 2020 registration results of the German Federal Motor Transport Authority (KBA) have also been included in the analysis.
The facts at a glance:
After the difficult months of the first hard lockdown, it was not clear how consumer behavior would develop. The used car market then stabilized at a good level over the remaining months. Lot times and vehicle values developed well from a retail perspective. Based on the KBA figures, there was a slight year-on-year decline of only -2.4% at the end of the year, while the new vehicle market was down 19.1%.
Findings on the 2020 used car market:
- The used car market as a whole was strong: High ownership transfer figures may have resulted from the middle of the year due to pull-forward or windfall effects caused by the VAT adjustment. Immediate availability, the fundamental focus on the vehicle as a safe means of transport and a means of traveling on vacation are further reasons. Especially in times of pandemic, only the car allows contactless mobility over longer distances.
- SUVs remain popular:The trend toward small and compact SUVs – as also seen in the new car market – is also evident in used cars. Newish, well-equipped vehicles (keyword: driver assistance systems) with modern Euro 6 engines were often purchased in order to stay mobile in the future.
- Willingness to invest was high:Looking at the average prices paid by an end consumer for a used car at the dealership, we saw a significant increase on the previous year. Many buyers certainly invested money that had been planned for vacations or other expenses in buying a car instead. Older vehicles were also purchased to a similarly high extent, as there is something for almost every budget on the used car market.
- Faster vehicle replacement:People have been jettisoning existing vehicles earlier in order to purchase a new used vehicle.
- Good used car year for dealers overall:As a result of the fact that factories were at a standstill and the supply of individually customized new cars was associated either with long delivery times or procurement difficulties, many prospective buyers opted for a used car. Because newer used cars were sometimes in short supply (many factory employees were unable to replace their vehicles, in some cases leases were extended, rental car fleets were not replaced in the usual cycle), they were in demand and could be marketed at higher average prices. Our analyses for December 2020 even show an increase in vehicle values (diesel: 52.5%, gasoline 56.6% from the previous new list price), which is rather unusual for a year-end. In addition, the lot time of the vehicles reduced significantly. After the end of the first lockdown, used cars sold very quickly at the dealerships. On average, vehicles sat on the lot for between 73 and 75 days in December, resulting in lower lot time costs and an easing of the situation for dealers in general.