Retailers under-pricing used cars as demand grows
New data from Auto Trader has revealed that used car prices grew in March following 10 months of softening demand.
Its Retail Price Index found the average retail value of a used car was £17,712 in the month, a two per cent rise on a like-for-like basis from 2022.
Sales volumes were also up in the month, meaning total sales in the first quarter of 2023 were up around seven per cent on the same period last year.
However, it believes retailers missed out on nearly £25.5m in potential profit during the month by pricing their stock below their true market value. Its data found that nearly 7,700 of its 15,000 retailer partners advertised their cars below their current value, costing them an average of £3,300 each.
Auto Trader’s director of data and insight, Richard Walker, said: “Given the stream of negative newspaper headlines, for many people the outlook for 2023 didn’t look promising. But against a backdrop of political and economic uncertainty, used car prices, and the market more broadly, has gone from strength-to-strength in quarter one. It’s a very encouraging start to the year and these strong market indicators adds to our confident outlook for the months ahead.
“Whilst other parts of the economy are subdued, the car industry is once again proving its resilience, but many retailers are inadvertently leaving profit potential on the table. To ensure businesses are securing the strongest margins possible, it’s vital they follow the data.”
