Dealers benefit from strong part-exchange market

Dealers benefit from strong part-exchange market at auction as Cox Automotive reveals increase in wholesale volume

Cox Automotive reveals increase in wholesale volume

Dealers benefitted from a strong part-exchange market at auction in March, according to new figures from Cox Automotive.

Manheim, Cox Automotive's online and physical auction business, saw double-digit growth in month-on-month part-exchange volumes at 17.5%.

The figures also show a month-on-month decrease in the average sold price for vehicles going under the hammer in March, dropping to £6,529, down 8.9% on February's average, but still 10% ahead of the same time last year.

Philip Nothard, Head of External Relations at Cox Automotive, said: "The strong rise in part-exchange volumes led to an overall increase of 3.3% in auction volume month-on-month.

"As expected, volume levels remained below the numbers seen in March 2017, which were higher than average due to changes in vehicle excise duty. The popularity of manufacturer scrappage schemes also impacted volume figures, with a fall of almost 20% year-on-year in the number of vehicles in the £0 - £5,000 bracket."

Figures from Cox Automotive's trade-to-trade online auction platform, Dealer Auction, reflect a similar picture, where volumes remained static year-on-year, but were up 5% on February 2018.

Dealer Auction also reported double-digit growth in volume for hybrid (45.3%), diesel (18.7%) and petrol (18.3%) vehicles compared to February 2018.

NextGear Capital, Cox Automotive's wholesale stock funding business, saw the average cost per unit remain steady at £7,042 in March (£7,002 in February) and the number of dealers using NextGear Capital increased from 1,427 to 1,454 in the month.

In the retail sector, Motors.co.uk, Cox Automotive's car search platform, confirmed that the average sold price increased by 5% (£13,018 in March 2018 v £12,425 in February 2018), up on the slight dip in February.

Motors.co.uk also revealed that while average prices for petrol vehicles sold on the site, remain steady year-on-year (£32,273 in March 2017 vs £32,055 in March 2018), the average price of diesel vehicles fell by 2% (£27,942 in March 2017 vs £27,349 in March 2018).

Nothard concluded: "Despite the continued trend towards an on-going reduction in new car registrations, there is cause for optimism when the figures are viewed in the long-term, rather than in direct comparison to 2017, as the number of registrations recorded remains the fourth highest in the decade.

"The usual seasonal effect of Easter and adverse weather conditions at the beginning of the month undoubtedly had an impact on results in March, but many dealers reported strong weeks in the latter part of the month, suggesting healthy levels of consumer demand.

"We must however consider this alongside the growing trend for dealers to shift their focus to used cars, which we believe will continue in the months ahead. We also expect a strong focus on aftersales to remain crucial to dealers as they seek to overcome margin pressures."

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