Fundamental changes across the vehicle remarketing landscape – from extraordinary values to an increasingly digital marketplace – have been revealed in new insights from the Vehicle Remarketing Association (VRA).

The VRA said 2021 has been one of the most unusual years, not just in remarketing but across the whole automotive sector

Its latest ‘Five Minute Briefing’ features summaries on the key sector trends for 2021 from six experts across the industry body’s board.

The explosion in used car values is a core theme. Since showrooms reopened in April, values have increased by over 27% according to Cap HPI data – labelled as an unbelievable ‘black swan’ moment by Derren Martin, head of valuations. The subsequent strong consumer demand is credited with driving prices up, exacerbated by vehicle supply shortages due to the global chip issues.

Philip Nothard, insight and strategy director at Cox Automotive and chair at the VRA, explained: “2021 has been one of the most unusual years, not just in remarketing but the whole automotive sector, that we at Cox Automotive have ever seen. Widely reported semiconductor and raw material shortages have decimated new vehicle manufacturing worldwide. This undoubtedly has had a knock-on effect on used vehicles causing a supply and demand imbalance. Consequently, Manheim Auctions has seen record increases in value and mileage of used vehicles nearly every month this year.”

Consumers have also been forced to turn to slightly older cars, due to reduced volumes of short-cycle models as a result of the pandemic, according to Jayson Whittington, chief car editor at Glass’s. This has added to the supply issues and again pushed prices up. Glass’s average residual value for a 36-month-old car in October was 25.6% higher than last year, according to latest data.

But there have been other notable remarketing sector changes too; including a marked transition to a more digitally driven wholesale ecosystem. Jon Davies, head of strategy and insight at Auto Trader UK, said that 72% of used car customers are now prepared to buy online.

Auto Trader also revealed that demand for electric vehicles is sky rocketing – one in five new car ad views by consumers are now for battery electric vehicles, up from one in 20 last year.

Meanwhile, Gary Xuereb, commercial director, DMN Logistics, has also revealed how the pandemic has had ongoing, knock-on effects for the vehicle logistics sector, while Cliff Deller, remarketing consultant, Aston Barclay Remarketing and The Car Buying Group, said supply and demand issues will continue well into 2022.

Philip Nothard, chair at the VRA, summed up: “Developments we have highlighted, such as new car shortages and rapidly rising used car values, are unlikely to be seen again in our working lives, and our experts provide a valuable insight into the changes they have seen.”

The ‘Five Minute Briefing’ can be obtained by emailing [email protected].

The VRA is also planning to continue its Five Minute Briefings into 2022 and is inviting suggestions from the remarketing sector on particular subjects to tackle.