Strong demand on second-hand market pushes up prices
In recent months, sales of used cars have outperformed those of new cars. On the one hand, because new sales are still relatively slow, but also because the mobility needs of private customers have changed. Increased demand, combined with a limited supply of young used vehicles, is also causing prices of pre-owned cars to rise.
The Belgian newspaper L’Avenir interviewed Frédéric Vassamillet, sales manager at Soco, one of the leaders on the second-hand market in Belgium. “At Soco, we always have 800 to 1 000 vehicles available for immediate delivery. He also points out that, with the rise of teleworking, people are doing less mileage.
Due to the Covid-19 pandemic, they also prefer to avoid public transport, making a second-hand car often quite interesting. As the need for travel has decreased with the health crisis, motorists can also keep their cars longer. Dealers have had fewer trade-ins, and, given the high demand for second-hand cars, they sell them themselves,” Vassamillet adds.
A limited supply of pre-owned vehicles
“In September 2020, up to 15% more used cars were sold compared to 2019. Over the whole of 2020, we expect (only) a 5% decline in sales,” says Filip Rylant, spokesman for sector organization Traxio. This is partly caused by the long delivery times for new cars due to the new RDE2 homologation method.
This impacts the supply of young used cars because leasing contracts are often extended in time. Also, short time rental companies in the tourism sector have downsized their fleets, limiting young used cars’ supply.
The technical gap between demand and supply
There is also a growing technical gap between the vehicles on offer and those sought by private customers. The fiscal rules of the game determine the choice of motorization of a company car. These mainly promote low CO2 emissions, which makes (semi-) electric vehicles interesting for professional use.
However, the private customer has far fewer (tax) advantages of such technology, which is more expensive to buy and more complex to service, and it requires additional (charging) infrastructure.
That is why consumers are mainly looking for ‘classic’ gasoline and diesel engines. As the supply of such used models is becoming more and more limited, the price increases, and in time, the offer of second-hand plug-in hybrids and EVs will only rise.