The new year has boosted the confidence of used car dealers on their prospects for the next quarter, according to the latest Cap Used Car Confidence Index.
Measured on a plus or minus numeric scale and based on dealers' opinions in November, the confidence index is now +19, a leap of 67 points from October when the majority expected a decline.
Confidence ratings in the used car market for the immediate future
##Used car December--none##
Yorkshire dealers are the most optimistic whilst those in Anglia, the North East and the south east and London expect business to remain stable.
According to Cap, the high confidence levels could have been stimulated by dealers' sales performance last month. Overall, used car sales were up by 7.1% in November against the same month last year.
The best performing region was the Midlands, which stormed ahead by 14.3%. This was followed by the south west and Wales where used car sales for the month were up by 12.8%. All other areas beat last year's performance with the exception of Scotland, where sales lagged by 5.6%.
The picture for the year so far was also positive. Compared with the same period last year, overall used car sales were up by 5.9%. However some regions outstripped this performance by a substantial amount. Best performers were the north east – up 12.2% - and Northern Ireland, which was ahead by 10.3%. Worst performers were the south east and London, up by just 0.8%, followed by the south west & Wales, at +3.5%.
The majority of dealers are now stating that their current used car sales are 'good.' This is an improvement on last month where the majority said sales were 'acceptable.'
In addition the number of dealers having 'poor' sales has dropped by 2.5%, although more now describe sales as 'disappointing' when compared with last month.
Small family cars are the best sales performers as used cars, followed by superminis. There is no improvement for used executive vehicles. Dealers felt their performance had worsened slightly in November. The same was true of large family cars. On the other hand the 4x4 sector continued to improve slightly. The number of used car sales involving a part exchange fell slightly in November, to 41%.
After a good performance in October, used car sales involving dealer finance fell back to a disappointing 27%.
“Dealers are upbeat about their prospects for next year. The majority, 46%, think that the used car market will improve on this year. A further 42% believe that business will remain the same, whilst just 11% think that things will get worse.
Despite this confidence dealers said that the used market will be facing a number of challenges. Some felt that they are struggling from a lack of good retailable used stock. There is also a fear that the new market is attracting buyers away from the used, with numerous promotions and low cost finance. Deals available on pre-registrations and ex-rental cars were said to be another reason for customers to desert the mainstream used car market,” says Cap. (January 2, 2002)