Lockdown produces mini boom in ‘staycations’, new cars and caravans
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All kinds of commodities have been impacted by an unexpected lift in values, and not just motor cars, as you may be surprised to learn a little later.
This started in 2020 and looks likely to continue this year.
One of my best indicators for actual values is through my account with British Cars Auctions (BCA) and their subsidiary buying arm, webuyanycar.com.
The former outfit has the largest unit number of vehicle disposals per week in the country.
It gives real time, on the day, actual prices paid for motor vehicles and is a reliable thermometer for what is going on in the market.
Lockdown introduced online only and account holder only sales, so no members of the public to skew values on the day.
Instead, of around 22,000 car sales per week, this roughly halved but still produced healthy sales and data as the source from main dealership part exchanges was ongoing.
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I was asked by a client to acquire a small hatchback under £5,000 and every time I identified a nice example, I was outbid by a good margin. This continued for several weeks to my consternation and surprise.
Other dealers were confirming a similar story up and down the country. Nice, low-mileage cars were making nearer top retail than normal trade money.
So, what was the reason? Well, two-fold.
Early on in the pandemic, the motor manufacturers went on a three-day restricted production output across Europe.
The new car showrooms rapidly sold out and dealers were clamouring for stock so late, low-mileage cars held strong values.
This demand rippled down through to lower value cars across the range. Good old-fashioned supply and demand.
You may recall precisely the same thing happened when the last big recession of 2008 barrelled in and car factory output slowed.
The other reason I discovered by chance, was that a vast number of dealers were out spending their recently received grant monies and other Government-backed easy loans like confetti. ‘Unintended consequences’ is a term that comes to mind.
Caravans and motorhomes also shot up in value and demand. This time by buyers denied their usual overseas family holiday and who realised conventional UK holiday destinations were rapidly selling out.
I hear new kitchen and bathroom sales are booming for much the same reason.
This same phenomenon applied to the luxury boat market. I sold a thirty-something-year old caravan that had seen better days on eBay for far more than it was worth and bidding was frenetic from the start.
I also attended the Historic Classic Car Auction event at Ascot with three client purchases in mind only to find we were outbid each time and in one case, by almost 100 per cent.
This auction is predominantly fuelled by classic car investors, not the general public looking for a summer sportscar, and so the assumption must be ‘safe-haven’ destination for their spare cash.
Indeed, the sale achieved a record 80 per cent hammer down rate against a more normal 65 per cent rate and with many new high value records being broken.
This was a seller’s market.
The current lockdown may produce similar trends for 2021. Unspent holiday money and other general savings made from staying indoors this winter may well generate a mini boom in ‘staycations’, new cars and caravans.
And the most surprising market I have learnt of is for the trend to buy dogs of mixed breed with names such as Cockerpoo, Springerpoo, Labradoodle and the like.
My recently retired college chum has settled for one of these at a remarkable £1,000.
When I questioned the logic and sense at such a price, he let me know that such was the demand, the breeders next batch were already sold, at £2,000 a pop, per pup.
And I thought they were called mongrels!