March has lived up to expectations as far as the level of used car retail demand is concerned. Most dealers have had a successful month and this has been reflected in the used car values being achieved by most disposers. Auction prices remain firm although buyers are becoming more picky and conversion rates are easing a touch.
The two-to-four year-old sector of the market is an area which is buoyant with this age of car in relatively short supply and retail demand quite strong. Anything in this bracket with sensible mileage and reasonable spec is attaining strong bids with most main dealers searching for this type of stock.
Poorly maintained cars are, however, beginning to struggle again and caution must be used when appraising anything on the poor side of average. Diesels continue to make strong money as do MPVs and cars combining the two seem a solid retail prospect.
Most of our trade contacts feel that this positive first quarter will continue into the coming months. There is no reason to suspect any different as long as the retail punters – who were noticeable by their absence last year – continue to grace showrooms and forecourts.
We are noticing a general acceptance from the trade that we are now part of a massive global industry, with ever-increasing numbers of grey and parallel imports entering the market as used cars. It is essential that we know how to value and deal with them.
The reluctance of prestige dealers to involve themselves with used parallels seems to be weakening. Many of these cars are proper spec and colours; other than the fact that they made a short stop somewhere on the continent, they are virtually identical to UK supplied vehicles.
With reasonably strong demand and limited supply in the executive sector for well equipped cars, it makes sense to look on parallels as a retail profit opportunity. We are noticing little difference in values between three-year-old UK supplied cars and parallel imports.
The grey market continues to tick along and as with any used cars at the moment, genuine clean condition cars with the correct paperwork will always find buyers.
I passed a showroom the other day with a stock of UK cars, parallel imports and grey imports – a sight you would rarely have come across 18 months ago. The trade being the trade, if a profit opportunity raises its head, it will be exploited to the full.
Late-plate cars have largely remained stable over the past few months, with the X-plate still fetching a strong premium. One of the reasons for this is the steady supply of buyers combined with the massive gap between list price and the initial used car market value.
The overall market seems delicately poised moving into the second quarter with the all-important retail demand still the key.