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Used car insight: Sales conversions improve as enquiries drop

Manheim’s Dealer Dashboard shows February retail sales of used cars were virtually flat month-on-month, with a 0.3 increase over January to an average of 13.9 units sold. 

Worryingly, February 2011 used car sales were lower than both February 2010 and 2009. Showroom and online enquires also dropped by 2.3 from last month, but test drives and sales conversion fared better.

The large family segment experienced the biggest rise in sales, all others remained relatively flat.

John Simpson, managing director, Manheim Retail Services, said recent economic indicators continue to point to a tough year on the retail high street.

“Fuel price and VAT increases have dampened any predicted early bounce and the Chancellor’s April budget could be a defining moment for the economy and even the Government.”

Wary window-shopping consumers need to be turned into hard sales leads by effective, imaginative and aggressive online and off-line marketing strategies, with dealers proactive in the marketplace and highly efficient in the showroom, he said.

In the wholesale market, stock for retail values rose by £665 to £9,056 in February, as average age and mile-age reduced across all segments and demand remained strong for younger stock.

With average first time conversion rates up to 90% (92% on the three largest segments) values are now £1,000 higher than the same period in 2010 and £1,892 higher than the same period in 2009.

The dearth of lower volumes of 1-3 year old vehicles entering the wholesale market current is helping keep prices strong.

Dealer part exchange values dropped slightly, down £55 to £2,423 in February, although this can be attributed to older (up 2.3 months), higher mileage (up 1,064) stock at auction, and prices are still very strong across all segments.

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