Dealers have seen a strong recovery in demand and values for used cars and the two biggest automotive retails revealed how they have coped over the last six months.
Pendragon said it was focussing on building volume within its used car business.
In the dealer group’s six month interim statement, Pendragon said it believed the recovery in values was due to demand outstripping supply. As a result, Pendragon has seen “greatly improved” used car margins and the
However, the largest dealer group in the UK said the start of the year created problems with used car volume performance due to lack of funding.
Pendragon said: “There has been a decline in our used car volumes mainly due to constraints on our ability to fund higher levels of stock in the early part of the year.
“Following the refinancing of the group, stock funding constraints have eased and our used stock levels are now in line with our expected higher activity level in this area.”
Trade and vehicle debtors are down by £5.6 million from the year end.
Recently, Experian published figures showing that used car volumes were 5% down for the first quarter compared to 2008 first quarter but were 17% up compared with the last quarter of 2008.
Pendragon said: “There has been no marked change in our ability to source finance for customers and we have seen income from this source remain in line with overall sales volumes although credit underwriting terms have tightened.”
Lookers’ chairman Phil White said the group had seen a strong recover in used values and volumes in the first half of this year, contrasting with the wild falls in the market during the second half of 2008.
White said: “Volumes have increased by 8.5% and with improved margins compared to the same period in 2008, there has been a significant improvement in profitability for the period.
“Our used car supermarkets have continued to benefit from the new management structure and have traded profitably in the period.”