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Part exchange profits on the rise - premium sector takes a hit

Franchise dealers are seeing a sharp rise in profitability from their trade stock via online auctions according to Dealer-Auction’s latest Profit Index, although reduced demand for 4x4s hit the premium sector.

Over the last three months, the average profit per part exchange has risen by 1.15% to 5.85%, with an increase in profit of £48 per vehicle, it says.



Overall, Cap Clean performance increased by 6% during this period (from 96% to 102%), while average part exchange prices rose by 8.3% (from £2,913 in December to £3,155 in February).


However, Dealer-Auction reports that demand for 4x4s has ‘dropped off considerably in the last six weeks’.

Profit per premium vehicle fluctuated from £219.24 in December up to £283.96 in January and down to £228.87 in February, while the percentage of premium brand vehicles sold over those three months went from 12.6% to 13.2% to 12.65%.



The average price of a premium used vehicle was £5,111 in December, £6,089 in January and £5,433 in February, which still represents a steady rise against Cap of 96%, 98% and 99% respectively.



Director Gavin Smith commented: “For too long, dealers have had a zero return on their trade cars from local traders and auctions.”

On average, franchise dealers are making £184.00 profit per vehicle from their trade cars with Dealer-Auction, but John Luck, general sales manager at Yeomans Toyota in Worthing, has traded around 350 cars at an average profit of more than £300.


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