One in Four Car Dealers Believe Used Margins Have Improved Despite Higher Wholesale Prices

With high levels of demand for used cars introducing more competition amongst dealers and wholesale price rises, there have been concerns about this having a negative on profit margins.

However, recent data from Next Gear Capital and Cox Automotive suggests that this is not the case.

NextGear Capital’s Report

In their latest sentiment survey, NextGear Capital and Cox Automotive found that 1 in 4 car dealers think that used car margins in 2018 have improved since last year.

According to their data, there had been a steady decrease in the age of funded vehicles to around 6 and a half years. This reduction has caused a 4.1 per cent annual rise in the sale price achieved on dealer forecourts, and over the same period, the average holding days also dropped by one to 59 days.

Liam Quegan, Managing Director of NextGear Capital, commented: ‘’The dive in the new vehicle registrations has translated into a surge of retail buyers entering the used market. At the same time the wholesale sector is experiencing a dearth of ex-manufacturer, fleet and lease stock. This is driving competition amongst dealers as they fight to maintain a strong pace of stock turn and satisfy demand’.’

More Dealers Look to Complementary Funding Options

‘’For many dealers, this necessity to strike fast when the right vehicle becomes available is placing an acute pressure on cash flow and as a result, we’re witnessing increasing numbers looking towards complementary funding options, including Stocking Plan, to boost their buyer power,” Quegan added.

‘’The number of units we’re funding is increasing month on month plus we’re experiencing a significant spike in the volume of credit limit extension requests. These are indicators of a buoyant market with buyers wanting the ability to flex their purchasing options in order to meet the demands of the market’’

To find out how Click Dealer can help your dealership make the most of the remainder of 2018, get in touch today by emailing us at marketing@clickdealer.co.uk, calling us on 01782 478220 or sending us a message via our contact page!