9:11 am, January 19, 2024
Used car dealers are currently missing out on more than £30m as a result of underpricing vehicles.
That is according to fresh data from Auto Trader which found that a whopping £31m is being left on the table due to dealers not valuing cars correctly.
Analysts at the automotive giant found that a whopping 47,500 cars, currently for sale on the platform from 8,000 different retailers, are presently being advertised for below their average retail market price.
The figure equates to a potential loss in margin of around £4,000 loss per retailer, despite a recent growth in consumer demand.
Auto Trader has reported a 6.9% rise in searches and advert views, compared to the same point last year, with over 40m visits to the site in January alone.
Stock levels are also failing to rise at the same rate, with the volume of available stock increasing just 0.4% on January 2023.
Despite this, the average price of a used car at the mid-month point is currently 6.2% down on the same point last year, at £17,108.
Experts say have put the slide down to sliding used EV prices and have called for a ‘nuanced’ approach to the market.
As a result of the ongoing de-fleeting of around 750,000 electric vehicles sold since 2020, the average price of sub three-year-old cars has dropped 8.4% to £28,485.
Meanwhile, cars aged 3-5 years old are down 7.8% to £19,420.
On the flip side, used cars more than 10-years-old are still recording positive price growth, with 10–15-year-old vehicles up 4.7% to £6,592 and vehicles aged 15 years and above have risen .3.5% to £5,728.
Reacting to the latest findings, Richard Walker, Auto Trader’s data and insight director, said: ‘Demand is robust, cars are selling quickly, and early indicators point to an uptick in transaction levels, so retailers should feel optimistic for the year ahead.
‘Although we are seeing a slight slowdown in the volume of cars being underpriced, it remains at an alarmingly high rate.
‘With these favourable market dynamics, trade and retail prices being out of sync can represent an opportunity – I strongly encourage retailers not to miss it.’
Dealers feeling positive ahead of 2024
With the new year now well underway, Auto Trader has been canvassing the thoughts of retailers about what they expect to see in 2024.
A survey of 1,649 retailers revealed a positive mindset with 58% saying they expect to perform better than they did in 2023.
A further 13% said they expected to remain at the same level, while just one in 10 retailers thought that consumer demand would be a major challenge in the next 12 months.
The biggest challenge indicated, at 29%, was the economic climate, and buyers’ affordability.
