TWO-fifths of UK dealers say they have increased their use of digital auction platforms due to COVID-19 lockdown, with 49 per cent of those indicating this will be a long-term change.

Only seven per cent said they have no intention of buying digitally, while one in five said they are going online in the short-term but will return to physical auctions as soon as possible.

Two-thirds of those surveyed say they expect their use of physical auctions to stay at pre-COVID-19 levels in the medium to long term, while 13 per cent actually expect their usage to increase.

Although 23 per cent say they will either decrease or stop attending altogether in the short to medium term, that figure falls to 11 per cent when asked about their medium to long term intentions.

Philip Nothard, customer insight & strategy director at Cox Automotive UK, commenting on the latest Cox Automotive UK research report said: “Half of the dealers who responded were using online platforms prior to Covid-19, but there’s no doubt the lockdown has accelerated adoption amongst those yet to embrace digital auctions.

“For a sizable proportion, the survey indicates that this use will continue to become the ‘new normal’.

“However, it’s also evident that when auction halls can safely reopen, plenty will be keen to once again be back in the lanes.

“Despite the inherent efficiency and convenience of digital channels, the social interaction, hands on access, and pure theatre of the physical auction remains a powerful attraction.

“As lockdown eases and the used market continues to build momentum, we advise dealers to maintain a flexible mindset and take advantage of the respective benefits of both channels.

“With demand expected to outstrip supply for the remainder of this year, dealers need to put themselves in a position to strike decisively on the vehicles they can retail successfully.”

Meanwhile, used car trading in the UK in the wake of the pandemic is showing similarity to Australia with this latest Cox Automotive research showing 90 per cent of dealers have said they won’t cut used-car prices because of expected demand for used stock.

Cox reported that just over half (54 per cent) of those surveyed said they would hold firm on prices. A third said they were waiting for market data before deciding. Less than 10 per cent plan to implement price reductions across the board.

The Cox report said that  the health and wellbeing of employees and customers was ranked highest in the survey as the most pressing concern after the lockdown caused by COVID-19.

Dealers ranking cashflow as their second most pressing concern.

Philip Nothard said his company was encouraged by the sentiment shared in this latest survey.

“It’s reassuring to see the overwhelming majority of dealers taking a calm and sensible view of their pricing strategies, despite the pressure they inevitably feel to get cash flowing back into their businesses,” he said.

“It’s absolutely right dealers wait for market data that’s based on actual transactions now.

“We expect unusual things to happen with used prices over the coming weeks as supply and demand imbalances work out.

“It’s inevitable dealers will be more receptive to deals from genuine buyers in the short term, but overall the feeling is used prices will settle reasonably quickly so panic-pricing to clear stock is not in the best interests of anyone,” he said.

By Neil Dowling