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!"
Let's start by looking at the facts - and see what's selling now.
The UK’s used car market declined in 2020, down -14.9% according to the latest figures released today by the Society of Motor Manufacturers and Traders (SMMT). 6,752,959 used car transactions took place, 1,182,146 fewer than in 2019, making 2020 the lowest performing year since 2012 as lockdown measures to tackle the coronavirus pandemic and turbulent consumer and business confidence dented sales.
Despite used car transactions increasing 3.7% in October, a fourth consecutive month of growth, the combination of new lockdowns and tougher restrictions across the UK later in the year saw activity tail off, with declines of -18.3% and -4.2% in November and December respectively. Combined Q4 transactions fell by -6.2% to 1,693,138, rounding off a difficult year for the sector.
But even with the downturn, the sector has held up extremely well given the difficulties that the market has had to contend with. It could have been much, much worse.
Updated - February 2021
The latest sales figures for 2020 overall show that the top selling 'Used Cars' for 2020 were:
- Ford Fiesta
- Vauxhall Corsa
- Ford Focus
- Volkswagen Golf
- Vauxhall Astra
- BMW 3 Series
- Volkswagen Polo
- Mercedes-Benz C-Class
- Audi A3
What's interesting here is that the top 5 sellers have hardly changed position since 2019 - nor indeed since 2018.
So, what does this tell you? That people's buying habits haven't 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 - February 2021
- Used car transactions fall -14.9% in 2020 with 6,752,959 units changing hands as coronavirus lockdowns curb activity.
- Weak end to year with Q4 transactions down -6.2% to round off a turbulent 2020 for the UK used car market.
- Alternatively fuelled vehicle used transactions rise 5.2% to 144,225 taking 2.1% market share.
- News comes as industry calls for reopening of automotive retail as soon as possible to help protect jobs and economy.
The good news for brokers is that the used car market remains resilient (as opposed to the 'new' car market) and ensures 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…