7:36 am, April 14, 2023
Lexus models made used car dealers the most profit last month, according to freshly released data.
The Japanese cars returned dealers an average retail margin of £3,350 on their forecourts.
Dealer Auction analyses the prices dealers charge in their showrooms compared with what they bought them for in trade sales to generate its ‘Retail Margin Monitor’ and has just released the data for March.
In the most profitable used car brand table, Subaru takes second place.
Its models returned dealers an average profit of £3,100, closely followed by the previous most-profitable brand, Land Rover, which returned an average of £3,000 per used car sale.
Dealer Auction’s Kieran TeeBoon said: ‘Historically, Land Rover has ruled the roost, only once before being knocked off the top spot by JLR stablemate Jaguar.
‘So Lexus and Subaru taking the top two spots is very interesting, although it’s worth noting that Subaru’s well-documented supply issues could be playing a part in driving prices up, and the heavy snowfall at the start of the month may well have contributed, as the marque is a popular, affordable, all-weather car.’
Sarah Marley, Dealer Auction’s sales and marketing director, told Car Dealer: ‘The changes we’ve seen in the top 10 rankings over the past few months underline just how fluid the used car market can be and therefore why it’s so important to stay on top of the trends.
‘Today’s money-spinner isn’t necessarily the same as yesterday’s!’
Used car profit margins: Top 10 brands
Source: Dealer Auction, March 2023
- Lexus, £3,350
- Subaru, £3,100
- Land Rover, £3,000
- Jeep, £2,700
- Jaguar, £2,600
- MG, £2,475
- BMW, £2,470
- DS, £2,400
- Mitsubishi, £2,380
- Mercedes, £2,300
Car dealers usually make an average of £1,500 profit per used car sale. In its recent results, listed dealer group Pendragon said it made £1,607 per used car sold in 2022.
And on a recent Car Dealer Podcast (listen below), Swansway boss Peter Smyth said the firm makes around £2,200 per used car that his group sells. Cazoo, meanwhile, made just £403 per car that it sold in 2022.
Dealer Auction’s data also breaks down sales to reveal the most profitable individual used car models.
It’s here where Land Rover really does rise to the top, with three models in the top five.
The Land Rover Discovery 4 made dealers the most profit in March, returning them £3,600 on average.
The Discovery Sport (£3,400) was in second place and the Range Rover Evoque was fourth, making dealers £3,100.
Used car profit margins: Top 10 models
Source: Dealer Auction, March 2023
- Land Rover Discovery 4, £3,600
- Land Rover Discovery Sport, £3,400
- Volvo XC90, £3,300
- Range Rover Evoque, £3,100
- Mitsubishi Outlander, £2,950
- BMW 3 Series, £2,450
- Volvo XC60, £2,360
- BMW X1, £2,350
- Citroen C4 Grand Picasso, £2,330
- Ford S-Max, £2,300
Dealer Auction said the inclusion of two people-carriers in the top 10 used models list was a ‘surprise’.
‘This suggests that dealers are getting ahead of the game by locating practical, family-friendly vehicles for the summer,’ said the firm.
‘Highly seasonal’ models such as the S-Max and Grand Picasso give dealers a ‘unique opportunity for profit’, added TeeBoon.
Richard Walker, director of insights at Auto Trader, said the data pointed to a positive outlook for the used car market for the rest of the year.
He said: ‘Given the stream of negative newspaper headlines, for many people the outlook for 2023 didn’t look promising.
‘But against a backdrop of political and economic uncertainty, used car prices, and the market more broadly, have gone from strength to strength in Q1, and the profitability of the models highlighted in the Retail Margin Monitor confirms this.’
Car Dealer reveals the most profitable dealer groups every year in our Top 100. Find out who topped the list last year in our video below.
