Market Tracker - June 2019

Accurate appraisals are key following drop in used car values, says Cox Automotive

June wholesale data

Stock availability in the wholesale market continued to improve in June, according to results released today by Cox Automotive.

Fleet volumes at Manheim increased significantly MoM, and in turn, the average price for fleet and part-exchange vehicles fell by 4.5% and 1.8% respectively.

Dealer Auction, the trade-to-trade online auction platform, also saw the overall average price fall MoM, down 3.3% to £4,476, although average performance against cap hpi value improved by 0.5%. The business continued on its impressive growth trajectory, recording a 30% year-on-year increase in the number of vehicles listed on the platform in June.

In terms of stock mix NextGear Capital recorded a fall in average vehicle age (down -1.6% to 72 months) and mileage (down -1.9% to 59,493) for vehicles bought using its stock funding plan.

Philip Nothard, Customer Insight and Strategy Director, said: “For the last 18 months and more we’ve seen a strong used car market with tough competition for vehicles. As a result, some dealers have been lulled into a false sense of security when valuing part-exchange vehicles.”

“With fleet volumes gradually increasing, and softer levels of demand, dealers can no longer rely on competition in the hall to off-set missed damage. With that in mind, we recommend that retailers review appraisal training for their sales team to make sure they offer fair and realistic values for part-exchange vehicles.”

June fuel data YoY

The average price for Alternative Fuel Vehicles continued to rise in June, while values for both diesel and petrol vehicles were down year-on-year.

June dealer sentiment

Following a challenging May, consumer demand picked up slightly in June, however more than half of dealers still felt that demand had fallen YoY according to the latest dealer sentiment survey from Modix, Cox Automotive’s digital marketing arm.

The new car market presents a varied picture, with some manufacturers reducing or removing quarterly targets, while others forecast higher than expected registrations.

In the used market, there is a welcome increase in stock availability, but one in three dealers reported increased overage stock, and higher days in stock YoY in the Modix dealer survey.

Nothard commented: “It’s clear that some manufacturers have enjoyed greater success than others in the first half of the year, but the introduction of RDE2 in September looks set to shake things up.”

“With dealers reporting concerns that some manufacturers are not fully prepared for the change, we could see a drop in new car availability, and an unseasonable number of August registrations. That said, the new legislation is unlikely to have the marked impact caused by the first phase of WLTP last year.”

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