10:47 am, October 3, 2024
Auto Trader has urged the used car industry to avoid unnecessary price correction, as it claims that the used car market enters the final quarter of this year in ‘very robust health’.
According to data from the most recent Auto Trader Retail Price Index, which monitors 800,000 vehicles each day to provide an overview of the latest retail price data from across the whole UK market, average prices were stronger than seasonal norms in September.
The figures suggest that used cars are selling fast and retailers sold more stock than this time last year, buoyed by sustained levels of consumer demand, combined with the ongoing constraints in used car supply.
Auto Trader says that although the average stock levels were down -5.4% in September, demand on it platform had risen for third consecutive month, equating to an 8% increase year-on-year. As a result, in September, it took an average of just 27 days for cars to leave forecourts, which is one day faster than in August, and four days quicker than last year.
Despite the negative press surrounding general EV uptake, Auto Trader’s latest data also shows that 3-5 year-old electric vehicles are outperforming the market, selling in just 19 days and helping to boost average prices 1.6% month-on-month.
With demand currently out-pacing supply, Auto Trader says retailers are well positioned to price more confidently.
‘Despite similar conditions this time last year, we saw many retailers adjust their retail prices in line with trends in the wholesale market, which resulted in a huge loss of margin potential,’ explains Richard Walker, Auto Trader’s data and insights director.
‘Whilst the used car market is buoyant, we know margins are becoming increasingly challenging to maintain, so I’d strongly urge retailers to listen to the retail data, and not unnecessarily lose out on profit potential available,’ he adds.
Despite the positive news on older electric vehicles, Walker is keen to point out that the story isn’t the same for nearly new electric models, or those less than a year old.
With brand-new EVs benefitting from an average discount of 11%, the nearly-new models are proving to be more of a challenge for retailers to sell: they took an average of 43 days to sell in September, more than twice as long as their 3-5-year-old counterparts, and longer than any other segment.
Walker said: ‘Used EVs are a particular bright spot this month, but as ever the market is very nuanced.
‘It’s important to analyse the data forensically to find the best stock for your forecourt, but our insights should provide confidence in the opportunities the electric market is able to offer.’
