Used car market stable despite uncertainty
The used car market is following normal seasonal patterns despite uncertainty in the economy as a whole, according to Manheim parent Cox Automotive.
The firm’s figures from Manheim show the wholesale market recorded its usual seasonal volume bounce in January while last month also saw the average value for part-exchange vehicles sold through Manheim’s auction lanes increase by 5% year-on-year to £4,369. Average mileage (75,716) remained on a par with mileage figures observed throughout 2018.
The growth comes as the SMMT reported a 1.6% fall in new car registrations for the month.
Philip Nothard, Cox Automotive UK’s customer insight and strategy director, said: “It’s positive to see the used car market following its normal seasonal pattern despite challenges in the new car market, some lingering issues around WLTP, and consumer uncertainty ahead of Brexit.
“The market for ready-to-retail vehicles, in particular, remains intensely competitive as dealers focus on the used market to bolster new car sales.”
His comments follow latest research from car valuations specialist Cazana showing consumer confidence may be low and used sales becoming more difficult, but levels are robust. The firm’s data indicates that despite confidence being at a 12-month low, cars are still selling and for high retail prices. According to director of valuations Rupert Pontin, used car PCP is helping to boost the market, with the use of PCP for a used car now more appealing than it has been in many years. This is backed up by the FLA, which has confirmed that used car finance penetration is at one of the highest-ever levels.
Cox’s Philip Nothard added that the growth is expected to continue: “As we move through February, uncertainty around Brexit in March, and new WLTP tax implications will encourage fleet owners and consumers to hold on to existing vehicles for a little longer, and I expect to see a continued focus on aftersales activity.”
“Despite the external challenges faced by the automotive industry, there is still cause for optimism. The used car market is relatively stable, and retailers looking ahead to the rest of 2019 remain focused on capitalising on the opportunities in this area.”