The used car market buoyant in September

Used car market shows its strength against double digit decline in new car market

Auction at Manheim Bristol

The used market remained buoyant this September, according to data released today by Cox Automotive UK, in stark contrast to the new car sector which witnessed a steep decline in registrations.

In the wholesale segment, Manheim, a leading provider of integrated products and services for the vehicle remarketing sector, saw selling prices remain steady, and in line with the year-to-date average. Strong buyer demand led to a 10% increase in conversion rates during September, with a similar hike in the conversion of provisional bids.

Results from Dealer Auction, Cox Automotive's trade-to-trade online auction platform, were also strong. The average sold price rose 6.2% to £5,016 (compared to the same period last year), while volumes of vehicles coming through the online lanes increased by 10%.

The positive performance of the used car sector in September comes as the SMMT reported a disturbing position for the new vehicle market for the same period. The SMMT reported that the number of total new vehicles registered was down 20.5% in September (compared to the same period in 2017) at 338,834, as WLTP emissions restrictions halted supply in an already uncertain economic market.

Commenting on the results, Cox Automotive's Customer Insight and Strategy Director Philip Nothard, said: "As many anticipated, the introduction of WLTP on the September new car market was severe, and signalled a clear lack of preparation from a number of manufacturers, however, the used car market remains extremely strong."

"For all dealers, networked and independent, the demand for good quality, used stock with the right specification continues to remain supercharged, and we expect fleet and manufacturer vehicles to remain at a premium as supply runs short."

"In this heated market and with demand outweighing supply, vendors are in a strong position. We would encourage dealers to complete pre-auction checks on vehicles before entering their bids, ensuring they are at the expected condition and can be placed on forecourts quickly to maximise the market opportunities."

NextGear Capital, Cox Automotive's wholesale stock funding business, also reported steady figures across the board for the wholesale sector. The average cost per unit increased by 4% to £7,703 while average holding days decreased by one to 59.

The retail market also showed positive results during September, with Cox Automotive's car search platform, Motors.co.uk, reporting that the average sold price of vehicles increased 1.6% to £14,599 (up 4.1% year-on-year).

Nothard continued: "The pressure in the new car market has resulted in an increased appetite for used cars, and customers have not been put off by a slight fall in supply."

"Dealers are working hard to refocus the stock on their forecourts to counteract any potential profit dips from new sales. We expect to see demand increase significantly for good quality, second hand and ex-fleet stock as we move into Q4. We are also witnessing increased demand for insight and support to manage stock profiles for age, mileage and vehicle type within the retail sector."

"Overall, despite the external pressures that continue to affect the overall UK automotive market, the used vehicle sector remains very strong indeed. And with supply expected to continue to fall and demand rising, we foresee a very busy end to the year for used cars."

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