October used car market

WLTP backlog for new cars boosts October used car market

Manheim auction

The used car market continued to outperform new in October, as data released today by Cox Automotive signals another positive month for dealers.

In the wholesale market, Manheim, a leading provider of integrated products and services for the vehicle remarketing sector, reported a leap in the volume of vehicles coming through its auction lanes, up 6.3% from September. The average mileage for vehicles sold was up 1.8% to 62,158, while the average selling price of vehicles dropped slightly by 2% on September to £6,242, reflecting a change in the mix of stock going through the lanes.

Cox Automotive’s trade-to-trade online auction platform, Dealer Auction, also reported increased volumes, up 16% year on year, with a 7.9% annual increase in average selling price (£4,829).

Meanwhile NextGear Capital, Cox Automotive's wholesale stock funding business, reported steady figures across the board, with the average cost per unit decreasing just 0.07% to £7,697 while average holding days remained steady month-on-month.

The data comes as the Society of Motor Manufacturers and Traders (SMMT) reports another disastrous month for the new car market, which fell 2.9% in October as model changes and backlogs caused by WLTP emissions testing continued to cause shortages. Declines were seen in both private and fleet sectors, with registrations down 1% and 5.2% respectively.

In light of the uncertainty over government policy on diesels, registrations of petrol cars rose 7.1%, with strong growth in alternatively fuelled vehicles, up 30.7%.

Commenting on the results, Philip Nothard, Customer Insight and Strategy Director - Cars at Cox Automotive, said: “The SMMT figures released this week demonstrate the continued pressures on the new market. As predicted, WLTP continues to impact the supply of new cars to dealers, and while the demand for hybrid and plug-in vehicles looks strong, the figures are behind Government ambitions.

“In contrast, the used market continues to gain pace. Volume across our wholesale auctions rose steadily throughout October, and good quality, ready to retail product continued to sell well.”

“Attendance at all auctions nationwide was high and we’ve seen a greater willingness by dealers to travel further to obtain good stock. As expected, vehicles that require reconditioning work have proved more difficult to shift and as such, we have seen great results for vendors who offer vehicles that need little to no post-auction attention.”

The retail market told a similar story in October, with figures holding steady across the board for Cox Automotive's car search platform, Motors.co.uk. The business reported a 0.3% increase in the average sold prices of vehicles (£14,644) while the average mileage of vehicles sold remained at 60k.

Strong demand was also reported for high specification vehicles, with valued extras such as panoramic roofs, privacy, larger alloys and reversing cameras achieving in excess of cap clean.

Nothard continued: “The positivity of the used car market is also demonstrated in the retail space, with very heavy demand across the UK and strong average sales prices for dealers.”

“Retail part-exchanges have performed well, and the corporate and fleet market have also achieved strong prices in the direct supply market. The ever-continuing conversations around fuel type continue to weigh on consumers’ minds, impacting on decision making for end customers, and while hybrids remain interesting, there is little appetite to purchase plug-in electric vehicles while logistical infrastructure remains low.”

“As we head towards the end of the year, the market - especially in wholesale - will continue to ride on the coat-tails of a strong autumn, with prices holding steady until January. Losses incurred as a result of the stunted new market will continue to spur on the demand for used, with dealers investing even more greatly to replenish lost new car revenues.”

“As we move into 2019, the uncertainty around Brexit will undoubtedly begin to loom even larger, but with the used car market in its strongest position for many years, we believe we are well placed to ride any storms that may come along.”

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