7:46 am, September 23, 2022

Profits on stock remain strong for car dealers despite the cost-of-living crisis – and Land Rover models are driving the largest margins.

That’s the word from Dealer Auction. Its Retail Margin report shows the British premium brand locked out the top four spaces in its most recent data.

Leading the way was the Land Rover Discovery 4, bringing in an average retail margin of £5,100 in August.

The family favourite was followed by the Range Rover Evoque (£3,780) and the Discovery Sport (£3,610). The Freelander 2 was ranked in fourth place (£3,100).

The Jaguar XF brought the next largest average profit margin at £3,070, followed by the Mazda CX-5 (£3,020), Volvo XC60 (£3,000) and the Vauxhall Zafira Tourer (£2,940).

The top 10 list was rounded off with the Nissan X-Trail and Skoda Superb which have a margins of £2,930 and £2,700 respectively.

Dealer Auction’s marketplace director Kieran TeeBoon said: ‘This is not a complete surprise considering Land Rover has successfully held top ranks for several months now, proving dealers aren’t shying away from sourcing premium brands, and that there is still considerable profit to be made on the right vehicle.’

The firm said that the rising cost of living is not deterring dealers from sourcing stock, especially as they are seeing good returns on premium models.

When it comes to brands, Land Rover leads the way again with an average retail margin of £3,780.

Jaguar is next at £3,280, followed by Jeep and Lexus both at £2,910, Subaru (£2,800), BMW (£2,750), Audi (£2,590), Volvo (£2,570), Mercedes-Benz (£2,470) and Alfa Romeo (£2,380).

TeeBoon added: ‘The current market uncertainty is unavoidable. But there are readily available tools that dealers can utilise to ensure each asset brings them the maximum profit.

‘When it comes to vehicle remarketing, time is money. So, whatever can be done to speed up the process will have an impact on the bottom line – ensuring a diverse list and affording dealers the largest possible profit.’

Dealer Auction is a joint venture between Cox Automotive and Auto Trader, and the latter’s data and insights director, Richard Walker, said: ‘Despite concerns or speculation of a market in decline, levels of consumer demand remain robust and above pre-pandemic levels, and so for retailers who arm themselves with the right information, there’s plenty of profit opportunities.

‘Our data shows that the recent decline in used car sales is heavily linked to the availability of stock; where available, sales are healthy – in the under five-year-old age cohort, stock levels dropped 19 per cent in Q2 of this year against 2019, and sales followed suit seeing a 24 per cent dip.

‘However, in the over five-year-old age bracket, where stock levels were up 14 per cent, sales saw a 15 per cent increase.

‘Highlighting the healthy level of consumer demand in the market, we saw a 27 per cent increase in advert views for cars aged over five years on our marketplace compared with August 2019.

‘It’s vital retailers are constantly reviewing their stocking and pricing decisions based on accurate data to ensure they’re getting the very best margins available.’

He added: ‘Similarly, and reassuringly, our data shows that used car values are following seasonal patterns on a month-on-month basis, and there are no indications that prices are softening beyond what we would expect.’