Mid-Year Overview of Used Car Market Demand

With the first half of 2018 nearing its end, it is time to start reviewing your dealership’s performance and looking at improvements to be made in the next half. Generally, it has been a very positive six months for the used car market and auctioneers are seeing high levels of demand, particularly for ready-to-retail stock.

The wholesale market is performing well at the moment and there has been a significant rise in the used car mid-market price bracket.

Rise in Vehicle Sales

Data from various automotive auction companies shows a clear growth in vehicles bought:

Manheim – Rise in the volume of vehicle sales in May and a 25.6% year-on-year increase in models priced between £10,000 and £40,000.

Dealer Auction – Increase of 13% in the volume of vehicle sales year on year and a significant growth in the average sale price from £510 to £4,440.

NextGear Capital – Increase of 7% in average cost per unit.

Key Trends and Preparation for the Second Half of the Year

There has also been a rise in interest in ready-to-retail vehicles, with dealers willing to wait for stock which is not in need of conditioning. This has resulted in cars that do require work, selling for less than their expected price. Used car dealers prepared to put a bit of extra work into their acquisitions could pick up some good deals here.

While mid-value vehicles have increased in popularity, the volume of those in the £0 to £5,000 bracket has declined by 9.5% year on year. Manufacturer scrappage schemes may be a contributing factor.

Philip Nothard, Head of External Relations for Cox Automotive, has seen clear signs that dealers are taking measures to protect themselves against the negativity surrounding diesel vehicles. He said, “In addition to adjusting stock volumes to decrease reliance on diesels, we have also noticed many dealers are offering better price points on diesel vehicles to ignite demand.”

The diesel market is becoming a very competitive environment, and dealers who have not had to do so already should be prepared to take action in order to remain a valid option for consumers interested in this fuel type.

Staying Vigilant

Foreseeing potential issues and opportunities is key for a successful business. As of yet, enough time has not passed to accurately assess the implications of the recent VED increases. The introduction of WLTP may also put certain pressures on some dealers. It is important to remain vigilant and flexible so that you are ready and able to adapt to the dynamic market.

For more information on how Click Dealer can enhance performance, stock-turn and profitability for your dealership, get in touch today via marketing@clickdealer.co.uk, 01782 478220 or through our contact page.