So… Just What Are We Talking About Here?
"CARS…. And lots of them! The latest figures show there being close to 32 million cars registered in the UK. And they change hands lots of times!"
"In 2020 alone, and even with the restrictions of the Covid pandemic, just under 7 million vehicles still changed hands in the UK used car market - which equates to just over 19,000 vehicles being bought and sold every single day. And that's a lot! This just helps to confirm the potential out there for your Car Broking business!"
But what's happening right now... in 2021?
Well, let's start by looking at the facts - and see what's selling now.
In the first quarter of 2021, the UK’s used car market declined some -8.9% according to the latest figures recently released by the Society of Motor Manufacturers and Traders (SMMT). Some 1,687,755 transactions took place, with the overall decline driven by large falls in January and February, of -27.1% and -19.4% respectively, as lockdown measures depressed demand and again closed car showrooms nationwide.
March saw the market show signs of recovery with a 32.2% year-on-year rise, amounting to 638,570 cars changing hands, although this compares with a weak March 2020 when the UK entered its first lockdown partway through the month. Compared with 2019, March was still down, -8.4%, and Q1 by
-16.5% or 332,389 fewer transactions.
Among the turbulence, demand for used battery electric (BEV), plug-in hybrid (PHEV) and hybrid vehicles (HEV) remained strong in Q1. Buyers were keen to purchase pre-owned ultra-low and zero emissions cars, helped by increased availability and more models available. HEV transactions rose 16.6% to 27,694 units while PHEVs saw a 32.1% uplift to 10,534 units, and BEVs surged 48.3% to 6,564 sales.
Given where we are now, after a year of COVID turmoil, the used car sector has held up extremely well given the difficulties that the market has had to contend with. It could easily have been so much worse.
Updated - May 2021
The latest sales figures for Q1 2021 overall show that the top selling 'Used Cars' were:
- Ford Fiesta
- Ford Focus
- Vauxhall Corsa
- Volkswagen Golf
- Vauxhall Astra
- BMW 3 Series
- Volkswagen Polo
- Audi A3
- BMW 1 Series
What's interesting here is that the top 5 sellers have hardly changed position over the last three years - since 2018.
So, what does this tell you? That people's buying habits haven't really changed that much - that's what.
And in the car broking business, it's about knowing what's in demand, what's selling well, and identifying where and what the best opportunities are going to be.
It's called... having your 'finger on the pulse'.
And something else you always need to consider is... colours! What's popular and what's not. Remember when white used to be the 'kiss of death'! Not any more - indeed on SUV's in particular, white in the 'new black'!
Always know what's moving and what isn't. For example, throughout 2020, the 10 most popular colours have been as follows:
- Silver / Aluminium
- Beige / Buff
Now... whilst all the above doesn’t necessarily reflect what’s moving in the used car sector, it does demonstrate patterns of supply and demand – and that’s important when you’re looking to decide what marques you want to broker in – particularly in the volume sector.
Automotive Headline News - May 2021
- Used car transactions fall -8.9% in Q1 2021 with 1,687,755 transactions.
- Monthly performances impacted by lockdowns, but March up on particularly weak 2020.
- Market for used plug-in vehicles stays strong with a 37.9% rise in Q1 transactions transactions.
The good news for brokers is that the used car market continues to be resilient - ensuring that there is a constant demand for used quality vehicles, both in the prestige and volume sectors.
If you are running your own business in the used car sector, you need to know what’s moving and what’s not. What are people buying? And most importantly... how this reflects what’s going to be in demand in the used car sector?
A car broker builds and develops their own network, working closely with buyers and dealers and feeds off them. The trade will define what's moving - so that's the demand. It's up to the broker to then provide the supply!
Where do people sell their cars?
Online is the place to be these days. If it's a particularly specialist vehicle, then the seller may also choose to advertise in some specialist magazines. And many people do still advertise in newspapers and various car magazines - so don't ignore these!
The Internet is literally awash with websites advertising cars for sale – and today there are a dozen or so 'Quick Sale' websites offering to take a seller's car off their hands - but for an absolute ‘rock-bottom’ price of course!
Typically though, just because a seller has advertised their car for sale on one or (more likely) several of the many websites around, this doesn't mean that they will find a buyer any quicker, or any more easily come to that. Indeed, the reverse can often be true as their advert gets 'lost' amongst many other or similar cars also being advertised.
How Can You Can Earn From The £128.5 Billion UK Car Market?
It’s simple really. The secret of success in any business can be broken down into 3 straight-forward steps:
- Find a market that NEEDS a certain product or service..
- Give them exactly what they want.. professionally, quickly and efficiently..
- See why these satisfied buyers will pay you good money for providing your services
This market we're talking about here is dealers in the motor trade. And they will utilise the services of a Car Broker to help them source the vehicles they're looking for, particularly when they cannot find what they need through their other channels of supply.
Equally, if you are able to offer them a really good vehicle that you've identified, and that the dealer knows can be easily 'moved on', then you're potentially in business to negotiate a deal.
As the dealer gets to know you, and realise how you can help them, they will soon start to use you as one of their regular supply channels, whilst also potentially referring you to other dealers. And this just shows how your network can quickly grow!
For you as a broker - it's all about establishing and building your network of contacts across these dealers and there are few markets and business models that are as straightforward to run and make a good income from than Car Broking.
But first... a little background information on the car broking business, and why it represents such a great opportunity for you in the months to come…