Key learnings and insights driving the used car market for independent dealers
Cox Automotive’s quarterly insight roundup, AutoFocus, explores some of the trends influencing automotive today – including the very latest insights on the used car market.
To help you stay abreast of the latest developments, here are the key takeaways, we think you should know…
- Compared to the previous two years, the top five European markets registered 6.5 million fewer vehicles in 2020 and 2021. Indications are a further 1.1 million were lost in the first quarter of this year alone. As the used car market contends with the pressures outside of supply, it is showing signs that the high level of demand is now starting to drop.
- We are likely to see a reduction in the number of units sold this year due to the current economic factors, which could still last for at least the next 12 months. This coupled with a decline in consumer confidence is creating a realignment in prices and used vehicle values in the wholesale and retail markets.
- The pressure is being felt most keenly in the zero to six, and sub-12 month-market. But in time and over the next 24 months, we will see this affecting other age segments starting with the one to three-year sector. Shortages will inevitably drop down to the late three-year, and the three to five-year market.
- While prices may be easing, there is still a lack of vehicles entering the market. We’re seeing prices plateau, particularly for sub-one-year and one-to-two-year cars.
- It is unlikely that the values for some sectors will return to pre-pandemic levels for several years, if at all. So, while stock supply remains low for manufacturers and current pricing conditions stay the same, it’s important for retailers to have a clear understanding of the dynamics of supply at a model and derivative level.
While there are many headwinds facing the new and used car markets, the industry has proven its resilience and it will continue to do so.
To read more of the detail, click here to access the latest issue of AutoFocus