Thursday, May 26

The second-hand market in 2021: less stock, more demand and skyrocketing prices



Last year the second-hand market rose by 9%, according to data from the employer’s association of vehicle sellers, Ganvam, reaching the 1,989,662 units. Despite improving compared to 2020, the used vehicle market (VO) remained one 5,2% below the pre-Covid figures, when the two million transfers were exceeded. Even so, the trend is positive and, according to frame count, CEO of Motoreto, everything indicates that it will continue to rise.

Motoreto, according Conde, is “an integral solution for the dealership business, a platform that gets them customers and stock and that applies technology to streamline car sales processes”. Motoreto only focuses on the second-hand market and, despite being born in 2020 just before the pandemic broke out, in 2021 they grew by nearly 400% and multiplied their team by three. “Distributors realize the need to adapt to new needs, demands and new sales channels,” says Conde, who warns that “the used vehicle sector is going to change more in the next five years than in the previous 100”.

The second-hand market was favored last year by the chip crisis, which prevented brands from offering stock of new vehicles and they were forced to give too long delivery times. Many, then, turned to the second-hand market, triggering demand until they regained the path of growth. The result is that, for every new car sold in 2021, were registered 2.3 transfers of used cars.

VO price goes up

Directly proportional to the demand and drop in stock is the rise in the price of second-hand vehicles, which in 2021, according Coches.net, stood at the 17,410 euros, 11.4% more above that of 2020, when it was 15,631 euros. Conde he attributes it simply to the law of supply and demand. “There is more demand, supply is scarce and prices rise,” he details. In addition, the director of Motoreto identifies two trends in the used market. “We see that buyers have seen that perhaps it is not worth buying a new car if the same model, used and in its first year, is worth a 20% less. We also see that the buyer adapts to the market as long as the offer is in a logical price range for him”, he explains.

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Even if Conde recognizes that “we have not stopped receiving demand and that if dealers pay more money now for a used car, it is because they understand that there is demand to recover the investment”, he anticipates that this price increase is a bubble that could burst. “I don’t know what will come first, the end of the chip crisis and the normalization of the market in terms of supply, or the bursting of the chip price bubble. VO”, he admits. In this sense, the founder of Motoreto is optimistic and foresees that this normalization of the stock “could arrive at the end of this year”. “This will cause VO prices to stabilize and the used market will continue to grow.” Conde believes that this crisis has made second-hand vehicles the first option for buyers and that the relationship between sales of new and used vehicles will be maintained when the supply of chips stabilizes.

Aging of the fleet and electrification

The second-hand car market has always been accused of contributing to the aging of the Spanish car park, which is among the oldest in Europe. Last year, despite the fact that the age group that grew the most was that of vehicles between five and eight years old, a 34,2%, they were only 173,699 units of that strip are sold, so their market share is very low. At the same time, transfers of cars over 15 years old rose by 22.7% and accumulated a 34% of the total market.

“The aging of the park comes from the sale of individuals. Cars sold from a professional source have an average age of between five and six years. What ages the park is not the second-hand vehicle, but where the sale takes place”, he explains. Conde. “You have to help the professional seller to control the market and have greater visibility within the market and adjust to the needs of the buyer, adapting in terms of technology and service,” he adds. Conde acknowledges that “in the same way that I can buy and reserve anything on the Internet, the same should happen with cars at a dealership”. In addition, remember that “professionals guarantee that the car is in perfect condition” and claims that “aid for the purchase of vehicles they should also focus on young VO”.

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As for electrification, Conde considers that “the second-hand market will play a key role in the electrification of the car park”. Last year there were just 10,069 used electric cars, according to Coches.net, those sold, a 113.5% more. The average price was 26.591 euros, an affordable figure considering that the vast majority of new electric cars exceed 30,000 euros. “The second-hand market will be important, first, because of the price issue, and then because we foresee a greater rotation of vehicles that will feed the market stock.” In this sense, in 2021 the stock of used 100% electric cars rose by 70%, especially vehicles with less than 20,000 kilometers, with 92.2%.

With everything, Conde admits that “we wanted to move too quickly from combustion to electrification. We have gone from white to black, skipping the greys, the range of vehicles with less polluting combustion or hybrids”. The second-hand market is good ground for these vehicles, with diesels dominating it with a share of 59%, and improving sales 7,2% compared to last year.


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