While the semiconductor chip crisis and supply chain issues continue to plague the new car market, the used car market continues to boom in 2022.
Prices for second-hand vehicles are still on the rise as dealers face an ever-growing demand in the absence of many new cars hitting the market.
With continued uncertainty about when the chip crisis will be resolved, sourcing quality stock seems set to remain one of the biggest challenges for the used car industry in 2022.
Motorway’s booming stock levels
However, we are really bucking the trend on supply challenges at Motorway.
We saw a big spike in great stock hitting our platform in January, as people looked to sell their car quickly and conveniently, all from home, at the start of the year.
Stock levels soared by 43 per cent compared with December – and by 187 per cent versus January 2021.
This meant the dealers on our platform were spoiled for choice when it came to bidding on great stock, and found it easier to restock their forecourts at a great price.
Sub-£15k vehicles are really in demand right now across the board, and prices for used cars in this bracket continue to rise due to supply shortages, which can have a big impact on resale margins.
We’re seeing healthy volumes of this stock on Motorway – right now, 70 per cent of our stock is sub-£15k, which is a 41 per cent increase on December and a 112 per cent year-on-year increase.
We’ve seen stock levels for sub-£10k cars rocket as well, with an 80 per cent increase on December levels.
From a 10-year-old BMW 520D M Sport with low mileage (39k) to a 2019 Bentley Continental GT with just 1,000 miles on the clock, there have been some incredible makes and models in our auctions every day.
As a result, we’ve been able to provide enough stock for everyone who wants it, without eating into their margins.
Dealer spotlight – Driving Cleaner Cars
One dealer who has really hit the ground running in 2022 is Driving Cleaner Cars, based in Southampton.
We asked director Marc Handscomb how he has been sourcing stock, what his best purchase was in January and how he thinks the rest of the year will fare.
Here is what he had to say:
Q: Looking at your January performance, how have you sourced stock to meet demand?
A: Alongside the struggles of selling cars comes the equally tough challenge of replacing them – and it’s not even as simple as just replacing them.
You need to restock with vehicles that have the correct desirability and condition and most importantly for the right money.
Since our business has grown considerably over the past 18 months, and with the current lack of cars in the trade market, we have had to diversify our tactics in sourcing stock.
Motorway has been practically good for us, now accounting for over 50 per cent of our 200+ per month stock.
Their descriptions are accurate and you get to inspect the purchase before payment. It’s easy to use and very transparent.
And as you have your own account manager, any issues or problems are dealt with promptly and effectively.
Q: When it comes to sourcing stock through Motorway, what has been your best buy in January, and why?
A: It’s hard to name a specific car. However, we have purchased a few in January which we literally just cleaned and then they were ready to retail.
In particular, we bought a Jaguar XE which was purchased with a great margin and described as just having some minor body work scratches.
When we inspected the vehicle, we realised they could be polished out with ease. The car was the owner’s pride and joy, it had just been serviced and also came with a full Jaguar history.
We sold it without any photos before it even went live on our website – it couldn’t have gone any better!
Q: How do you think the rest of the year will pan out?
A: I think this year will be good. If you have a strong proposition and you’re a dynamic business with a strong online presence, then there is no reason why you can’t achieve what you want.
There will be the usual struggles with stock and keeping prep costs down while supplying a quality product and at the same time aiming to achieve your margins.
Everyone is always striving for good online reviews and that will continue. But if you are all over these things then there is a strong market to be taken advantage of. Bring it on!
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