However, Pontin said he is bothered by the pressure being put on the UK’s new car market, and how that may filter down to the used car market.

Some dealers are already halting used car purchases towards the end of the month because they know their manufacturer will require them to take a pack of new cars as the registration target nears. Coupled with the trend of bringing PCP customers in early to change, Pontin fears this will put pressure on the market for 18-24-month cars too, with franchised dealers forced to dispose of excess stock to independents.

“For a while, there will be a marketplace for them, while independents can get their hands on some nice 18-month old vehicles, but then they’ll get towards saturation point. So how do you sell? The only way to sell is to create a used buyer for the car, with creative finance or dropping the price. Then we’ll have a net effect. That’s a long way down the line, but looking at what might play out over the next three years, that’s a scenario.”

 

Risks & opportunities in the used car market

D-segment

Glass’s and CAP both urge caution around holding significant stocks of D-segment large family saloons and estates. There are many available from ex-fleet sources, but large cars such as Vauxhall’s Insignia, Ford’s Mondeo and Peugeot’s 508 have fallen out of favour with the majority of new car buyers and this trend is filtering down to retail used car customers. CAP’s Robert Hester said there are still customers for such used cars, attracted by the space and value for money on offer,  but they will expect to get a bargain.

Electric vehicles

CAP believes EVs are still some way from seeing stability in the used car market. It’s a segment that has seen continual pressure on values already. If Tesla is successful in bringing to market its next lower-medium segment electric car, with a range of more than 200 miles, Hester believes that will “destroy anything already in the marketplace with less than 100 miles range”.

Crossovers

The lifestyle SUV or ‘soft-roader’ is attracting consumers who like the higher driving position, space and car-like driving experience. Both CAP and Glass’s agree this is an exciting segment and one which dealers ought to be involved in, even if it means stocking vehicles from outside the franchise.

Hybrids

The petrol-electric hybrid has been available to new car buyers for several years now, but successful sales of such cars to used car customers requires accurate know-how, suggested Pontin at Glass’s. He believes this segment is an opportunity for the switched-on dealer, but sales staff must be well trained and properly qualify the customer’s driving habits and needs.