The March used car market shows no signs of slowing down, in fact according to our sources around the country if anything – as stock levels decline and demand grows – prices are actually rising. There are cars out on the market from almost every sector which some dealers tell us are now making more on the wholesale market than retail buyers were paying less than 6 weeks ago. Let’s consider that for a moment, whilst every time you open a newspaper turn on the news or indeed look at many car websites there seems to be only bad news with a sprinkling of skepticism if anyone says they are doing well. But used cars continue to sell by the truckload and most dealers are selling them profitably. There are, of course exceptions and certain pockets of the country have been truly decimated but the truth is the auctions are breaking conversion and percentage above cap records left right and centre, 4wd drive cars are making a bigger comeback than Take That, and used car displays are wiped out as customer demand continues unabated. The fact that used car trade prices have risen by as much as 20% this year tells its own story.
So why is this and when will it end? The fear with some dealers is that if they join the buying frenzy and demand falls they will be left holding potentially expensive cars which they cannot sell and lose money thus preventing them from buying fresh stock. But if they don’t join in they will have no cars to sell and therefore have no chance of turning that precious display space into a profit. All we do know is that some dealers are achieving sales of used cars which have helped them smash nearly all their Q1&2 departmental budget plans already.
One thing’s for sure we will keep a close eye on the situation and if and when prices ease you will be the first to know about it!