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How are Car Dealers Expected to Perform in 2021?

By: Craig Harbour


How to Run a Used Car Dealership

2020 was a year to forget for car dealers with the sale of new cars plummeting by almost 30% as a result of the pandemic. The lockdown, restrictions and low consumer confidence were all contributing factors to “the lost year”, but what can dealers expect from 2021 in a year where there are reasons to be optimistic but the pandemic continues?

A Slow Start

The year did not get off to a great start for those in the auto industry with new car registrations down 40% compared to last year. This is hardly surprising as the start of a new year did not magically fix the issues and starting the year in lockdown was always going to make it tough.

Issues Affecting the Market

It is likely to continue to be a challenging few months ahead for car dealers even as restrictions begin to lift. It is likely that consumer confidence is low, plus with the furlough scheme ending, unemployment on the rise and the impact of Brexit still unclear, it seems that many will be trying to avoid any big-ticket purchases. This is obviously a huge concern for those in the auto industry, but there are reasons to be optimistic looking further ahead.

Reasons to be Optimistic

As restrictions begin to ease and life returns to some kind of normality, it is likely that people will still be cautious about public transport so many people will be looking to drive and there will be pent up demand. Research found that most UK dealers were confident that the new and used car demand would rise in 2021, particularly if people start to return to work.

Additionally, the rise of electric cars will also bring hope to dealerships as motorists look to make the switch ahead of the 2030 ban on the sale of petrol and diesel. To encourage customers and build stronger relationships, dealers will want to make sure that people have the right insurance in place while on the roads.


It looks like it will still be a challenging year for car dealers, especially starting the year in lockdown. Fortunately, there is government support to manage in the interim in the form of the furlough scheme, bounce back loans and VAT payment postponements, so hopefully dealers will be able to weather the storm for a little longer before things start to pick up once again.

It has been an extremely tough time for car dealers during the course of the pandemic and while things are still tough right now, there are reasons to be optimistic looking ahead.

Published: March 31, 2021

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