Used market continues to provide certainty

Used market continues to provide certainty as dealers navigate challenging month in new car sector

Cox Automotive April Market Report

Data from Cox Automotive confirms that dealers continue to rely on the used car market to drive sales against a backdrop of uncertainty and challenge in the new car sector.

Manheim, the leading vehicle auction company, reported that volumes of vehicles sold through its physical and online lanes were on par with the previous month while vehicle condition and mileage also remained steady.

Average sold prices were stable for both ex-fleet and part-exchange vehicles, shifting marginally against the prior month, up 1% to £6,623 (18.6% higher than this time last year).

In terms of fuel type, volumes of petrol vehicles continued to sell well and diesel volumes in the used market continue to prove strong, increasing 7% on 2017 figures. Interest in electric vehicles also continued to rise, up 18% year-on-year.

Cox Automotive's Philip Nothard said: "In the main, we are seeing a very strong used market. It's performing very well in comparison to last year's figures, and especially in comparison to the new market, which is stalling."

"This consistency has been well received by dealers given the challenging last few months of 2017, and there is a definite feeling of confidence as we move through to the middle of the year."

"Looking at the wholesale market specifically, we've seen good volumes continue to flow through auction lanes this quarter with prices holding steady. Buyers are continuing to pay a premium for ready-to-retail stock, while they remain cautious about sub-prime vehicles and are carefully weighing up the ROI on refurbishment costs."

Dealer Auction, the trade-to-trade online auction platform, also reflected the market stability, and once again proved adoption of digital bidding is gaining pace. The portal revealed a 20% year-on-year increase in volume coming through the lanes and a 12% uplift in average sales price.

Completing the wholesale picture, figures from NextGear Capital, Cox Automotive's wholesale stock funding business, reported a 1% increase in average cost per unit from £7,119 from £7,042 in March. Average holding days also increased to 55.5 from 54.9 in March.

Positivity surrounding the used market is mirrored in the retail sector. Motors.co.uk, Cox Automotive's car search platform, confirmed that the average sold price was up 2.97% on 2017 figures, standing at £12,903, despite vehicles selling at a slower pace. Motors.co.uk's data also shows that consumer demand for electric vehicles surged, with alternative fuel vehicles spending seven fewer days on forecourts than the same period last year (48 days in 2017 vs. 41 days in 2018).

The data also revealed smaller, more affordable vehicles continued to perform well for dealers, outselling larger, prestige models, which is a trend carried over from the previous quarter,

Nothard continued: "With the news about Vauxhall, last month saw uncertainty in the new car market, however the results across wholesale and retail clearly show this has yet to impact on market performance."

"Moving through Q2, although there are unknowns such as WLTP's potential to impact manufacturers' production schedules, we still expect buyer appetite to remain steady for used vehicle stock."

"This positivity is reflected across the market and our recent data shows that 57% of dealers expect to continue to source stock at the same level over the coming months - a confidence that is underpinned by the strength of balance sheets across the sector."

Latest from Cox Automotive

12th April, 2019

Strong LCV volumes at Manheim despite Brexit uncertainty

Manheim, the UK’s number one CV auction company, recorded strong results for March, with volume up 4% year-on-year.

Read more
11th April, 2019

Market Tracker - March 2019

Part-ex volumes increased by 10% year-on-year at Manheim in March, but the Modix sentiment survey revealed that dealers saw a fall in demand when compared to March 2018.

Read more
25th March, 2019

Cox Automotive saves 8 million litres of water, and counting…

Cox Automotive has helped to reduce water wastage with an innovative water recirculation system at its Manheim Gloucester, Colchester and Leeds centres.

Read more
18th March, 2019

Why automotive has some catching up to do when it comes to diversity

Martin Forbes gives his take on the importance of diversity, and why automotive has some catching up to do.

Read more
More articles