Dealers turn sights to used cars
Dealers are looking to stock and retail a greater volume of used cars next year, helping to further drive used car values.
The latest dealer sentiment survey undertaken by Manheim found that four in five dealers report having investment plans to support their used car business in 2019. Half say they plan to invest in additional used car stock, while one in five say they will be investing in preparation facilities, including reconditioning and retail ready capabilities. A total of 7% plan to invest in additional locations for the retailing of used vehicles.
Manheim said the sentiment corresponds with an uplift in buyer activity seen in September when it saw a 10% increase in conversion rates for vehicles sold under the hammer, and a similar increase in the conversion of provisional bids. In response to wholesale prices strengthening and a shortage of used vehicle stock, dealers are taking a hands-on approach to sourcing used vehicles.
Commenting on the findings, Manheim’s Philip Nothard said: “There’s no sign of a slowdown as we head into the festive season, and plans highlighted for 2019 indicate a continued ambition for their used car businesses.
“But for any serious ambitions of growth to be realised, we need new vehicle sales to return to normal patterns and the dam currently restricting the flow of used stock into the wholesale market breaching. Figures published in recent weeks about the volume of new cars yet to complete their WLTP testing does leave some cause for concern, but I remain confident significant ground will be made on this by the close of the year, paving the way for a very buoyant first quarter of 2019.”
The research from Manheim has been published as reports continue to highlight increasing car buyer interest in used cars due to WLTP challenges. This includes Startline Motor Finance, which has said that increased economic uncertainty is also affecting retail car buyers’ decisions, with evidence of a switch to used car alternatives.