Prices in the used vehicle sector are being artificially inflated post-WLTP as dealers turn to ex-fleet and nearly new stock to compensate for new car shortages.

SVA says franchised dealer groups are buying more and paying more when it comes to nearly new and ex-fleet stock

So says Shoreham Vehicle Auctions (SVA), adding that prices are likely to say high until the plate change in the spring.

According to the auction specialist, there has been a noticeable increase in franchised dealer activity within the used car buying sector in the wake of a 20.5% fall in new car registrations in September, as franchised dealers turn to the used sector as a solution to improve their profitability.

It comes as Jato reports that half of new cars are still not WLTP-tested.

Alex Wright, managing director at SVA, explained: “Certain brands are finding it a challenge to source new vehicles post-WLTP and their franchised dealers are searching online and physical auctions country-wide for sufficient used stock for their forecourts.”

Wright added that franchised dealers have also been turning to buying good quality two and three-year-old ex-fleet stock over the course of 2018 to keep their used forecourts full. Meanwhile, leasing operators have been extending lease terms as they have been unable to source new cars for clients.

And as dealer groups buy more and pay more for nearly new and ex-fleet stock, the independent dealers are finding it hard to compete with that buying power and are having to temporarily shift focus to lower specification and lower price cars.

Wright explained: “What all this has served to do is artificially inflate prices within the used market. Prices at auction can increase very easily and it takes time for the books to readjust. Everyone in business likes a seasonal trend for comfort and WLTP has thrown that out for now. I have no doubt the market will settle but we’re of the opinion that won’t be until the next registration introduction in March next year.”