9:24 am, January 11, 2024
Land Rover models made used car dealers the largest profit margins for the third year in a row in 2023, according to new data from trade to trade to trade website, Dealer Auction.
The British marque has dominated the firm’s monthly lists throughout the year and has once again come out on top when it comes to both brands and models.
The Range Rover Evoque took first place in the annual models list, with Dealer Auction’s ‘Retail Margin Monitor’ report showing it made car dealers an average profit of £3,325.
It takes the title from last year’s winner – the Land Rover Discovery 4 – which made car dealers an average of £4,340 in 2022.
Another Land Rover – the Freelander 2 – also featured in the this year’s Top 10 with an average profit margin of £2,425.
The marketplace works out its list by monitoring what the cars sold for on its dealer-to-dealer platform and what the cars eventually retail for on Auto Trader.
It doesn’t account for any discounts or deals applied by the dealer in the showrooms, but gives a good guide to the margins available.
The Evoque has performed well throughout the year, achieving its highest profit margin in November when dealers were making a whopping £5,100 on each car.
Land Rover also topped the 2021 annual list with the Discovery 4 taking first back then with a profit margin of £3,060.
Biggest used car profit margins 2023 (models)
Source: Dealer Auction Retail Margin Monitor, average profit margin and days to sell in brackets
- Range Rover Evoque – £3,325 (37 days)
- Volvo XC60 – £2,700 (38 days)
- Mercedes E-Class – £2,650 (43 days)
- BMW 3 Series – £2,575 (41 days)
- Jaguar XF – £2,550 (39 days)
- Mercedes C-Class – £2,500 (41 days)
- Mercedes A-Class – £2,450 (38 days)
- Land Rover Freelander 2 – £2,425 (38 days)
- Mini Countryman – £2,375 (40 days)
- BMW 1 Series – £2,325 (36 days)
Reacting to the results, Kieran TeeBoon, Dealer Auction’s marketplace director, said: ‘The top-selling profit-makers were consistent in 2023, with Land Rover continuing to reign supreme and other premium models regularly appearing in the top 10.
‘Despite the economic and political headwinds in 2023, it’s clear that there are significant opportunities for stock-savvy dealers to bolster their profit margins and start 2024 on a high.
‘The new data adds valuable extra context for dealers, too – for example, the tenth-place BMW 1 Series was the quickest seller of the year.’
On a brand level, Land Rover once again led the way, with an average retail margin of £3,425.
Its sister brand, Jaguar, came second last year but has now dropped out of the Top 10 altogether after a difficult year for the outfit.
Instead, German rivals BMW and Mercedes take second and third place respectively.
Over the year, Land Rover ranked first in 11 out of 12 months, while BMW and Mercedes-Benz held top three spots ten times and six times each.
The year also saw a greater variety of brands in the Top 10 after the 2022 and 2021 both saw the same premium marques made up the entire list.
In 2023 there was a 60:40 split between premium and mainstream makes.
Biggest used car profit margins 2023 (brands)
- Land Rover – £3,425
- BMW – £2,700
- Mercedes-Benz – £2,575
- Volvo – £2,500
- Audi – £2,450
- Mini – £2,225
- Kia – £2,010
- Mazda – £2,000
- Volkswagen – £1,980
- Nissan – £1,975
TeeBoon added: ‘Reflecting on the full year of Retail Margin Monitors truly shows the value in using data to guide your decision making.
‘While there’s some consistency in the tables, there’s been plenty of curve balls too.
‘This year, for example, we’ve seen certain Renault and Peugeot models show great profit potential for the first time and affordable brands like Kia and Mazda have entered the annual top ten.
‘Profit may not always be where you expect it so staying informed is key.’
‘Cars are being priced below their market value’
Auto Trader says that Dealer Auction’s data highlights the importance of dealers taking a data-driven approach to pricing.
The automotive giant warned that as many as 52,000 cars are currently being priced below their market value by around 8,000 dealers.
The firm says the trend can be put down to retailers guiding their prices off wholesale trends, which could be costing them more than £35m in lost profits.
Reacting to the findings, Richard Walker, director of data and insights at Auto Trader, said: ‘The RMM again reveals the many profit opportunities available to retailers who make data-driven pricing decisions.
‘Our data clearly shows that the fundamentals of the used car market remain solid; consumer demand is robust, and cars are selling quickly, which combined with the slow return in supply, means retail prices continue to show more resilience than trade.
‘Worryingly, it appears some pricing strategies are being guided by wholesale trends, placing pressure on retail values, and risking profits in the process.
‘Our data shows that nearly 52,000 cars are currently being priced below their market value by circa 8,000 retailers, which is potentially costing them over £35m in lost profits.
‘Rather than just a cause for concern, the retail and wholesale markets being out of sync also presents a profit opportunity for retailers who analyse the data on a car-by-car basis and price stock relative to retail valuations.’
