AFV Shortage Means Good Profit Chance For Dealers
- June 27, 2019
- Posted by: John Swift
- Category: Automotive Industry
Used car dealers can make a good margin on second-hand hybrids or electric vehicles with a new report showing their values accelerating into the fast lane with a growth of nearly 5% as demand far outstrips supply.
The latest Auto Trader Retail Price Index shows that Alternative Fuel Vehicles (AFV) are seeing spectacular rises and the average advertised price of £21,663 is nearly double that of petrol or diesel cars. EVs are the stand-out performers specifically with price growth remaining in double digits at 12% and they continue to rise in average price too with the figure of £23,771 the highest on record.
There is a window of opportunity for dealers to cash in on a huge but currently unfulfilled demand for AFVs. Auto Trader says 8% of the searches by fuel type in May were for AFVs, but at the moment they account for just 1% of the listed stock.
A spokesman said:
“The number of people searching for an AFV has increased to an all-time high, with 8% of all fuel related searches on Auto Trader for the fuel type this month. Petrol has lost the share gained by AFVs, accounting for 51% of all fuel related searches. Searches for diesel remains flat at 41%. The continued surge in prices of low-emission vehicles can be attributed to supply and demand. On Auto Trader, the UK’s largest automotive digital marketplace, AFVs currently account for just 1% of the stock listed, whilst petrol and diesel account for 52% and 47% respectively.”
Prices are still growing but at a slower rate
Speaking of the used car sector generally, Auto Trader said that the market remains robust despite the wider economic and political concerns and that there is still growth in values – at 0.8% – even if the rate of it has slowed to the most sluggish since December 2016. The average diesel price now stands at £14,163 and £11,174 for petrol although this is a monthly rise of 1% for unleaded fuelled cars.
Karolina Edwards-Smajda, Auto Trader’s Director of Commercial Products, said:
“There has been much rhetoric around the strength of the used car market in recent weeks, namely that prices have plummeted. However, Auto Trader data tells a different story. Prices are still growing, it’s just that the rate of growth is slower than we’re accustomed to and that we’ve seen in recent months.
“Looking at circa three-year-old stock with around 60,000 miles on the clock, it’s clear the seasonal trend has an impact annually, driven by the March registration plate change. Month-on-month impact on price is down 3.6% which is less severe than we saw in 2018, 2017, 2012 and 2011.”