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Used car sales go up by 16.5 per cent but supply problems still weigh heavy

  • Defleet and prep supply chain delays are hampering things
  • Days to sell down by 10 days since beginning of year
  • Warning given over ‘important’ looming clouds

Time 3 weeks ago

Supply problems are proving to be the main issue in the used car market at the moment, says Cazana.

In its latest Weekly Pricing insight, the used car valuations firm said defleet and prep supply chain delays were hampering things, with Vehicle Remarketing Association members struggling to meet demand every day because of the ‘challenging social distancing rules’.

That had led to a ‘sometimes erratic supply’, causing ‘some quite extraordinary pricing for some used car stock’, although it only tended to happen with businesses that were ‘exceedingly short of stock’ or where a vehicle was being bought for a sold order.


Furthermore, Cazana said the worry was the enhanced wholesale price wasn’t recoverable by any corresponding rise in the car’s retail price.

Dealers were also reporting some hesitancy among buyers in showrooms to commit when it got to the point of closing the sale, which Cazana said was ‘symptomatic of the new normal’ as online transactions seemed to be consistent.

Cazana said that for the week beginning May 17, used car sales had gone up by 16.5 per cent week on week, although no figures were given.

Meanwhile, its Used Car Retail Price Index had slipped by 0.9 per cent – believed to be a reflection of how difficult getting replacement used cars had been.

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New retail advert listings fell by 1.6 per cent, which was seen as an indication of the stock profile in the used car market as opposed to an indication that used car prices were dropping.

The average number of days to sell has fallen by 10 days to 32 days since the start of the year, said Cazana, making a massive difference to a dealership.

As an example, whereas a 50-car pitch would have sold 435 vehicles during the year, that had shot up to 570, and director of insight Rupert Pontin said ‘as such it is not difficult to understand why so many retail groups and independent retailers have seen such an increase in financial performance over recent months and weeks’.

But he warned that although the used car market was still in good health, there were ‘important warning clouds’ looming.

He said: ‘Monitoring sales activity and being aware that big-ticket item expenditure over the coming weeks will become more competitive as the weather improves and travel restrictions are further lifted is key.

‘Additionally, the concern over used car stock availability and the resulting high auction pricing is cause for concern, as this perceived widespread uplift is not translating to the retail pricing.

‘Buying with care and being fully aware of today’s retail pricing is essential for commercial success.’

John Bowman's avatar

John has been with Car Dealer since 2013 after spending 25 years in the newspaper industry as a reporter then a sub-editor/assistant chief sub-editor on regional and national titles. John is chief sub-editor in the editorial department, working on Car Dealer, as well as handling social media.

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