Author: Rupert Pontin (pictured), head of valuations, Glass's
Whilst there has been a great degree of discussion around activity in the new car market and significant speculation around the impact that new car pre-registration activity has had on the used car trade, there has been little time given to the retail used car market place.
It is all too easy to forget that a comprehensive review of the retail market can be a key indicator as to what will happen in the coming weeks on the used car pitches nationwide.
It is evident that with consumer confidence running high the used retail market has continued to grow in strength and the recent general election appears to have given further comfort to the majority of ‘big ticket’ product buyers.
Glass’s has always held the view that 2015 would be a good year for both the new and the used market, although with the caveat that there will be challenges towards the end of the year, but there are a number of key factors that can demonstrate the depth of confidence that is showing in the used retail market and the impact of the successful new car market.
The table below uses data from Glass’s Radar and is interesting because it shows that in the last six months the average age of a used car has dropped noticeably.
This is indicative of the fact, revealed by Glass’s some months ago, that the number of pre-registered vehicles available in the market has been on the increase.
There have been multiple varied discussions on this topic, but the chart below clearly confirms this.
One would naturally expect there would be a peak of sub-one year old vehicles in the market during the plate change months and at the beginning of the year, but the volume has historically been much lower during these periods and there has not been an upward trend line.
Over the last six months the volume has increased by 38%, although from October 2014 to March 2015 this figure was actually 91%, albeit this accounts for the March plate change boost.
Another key indicator of market strength is the time that it takes for a used retail vehicle to sell and so far this year this has been steadily declining as detailed below.
However, whilst this alone is compelling, it is also pertinent to note that the number of price changes required to sell a vehicle and the percentage discount given during the period that the vehicle was first advertised to the point of sale, are both decreasing.
This clearly supports the view that we are enjoying an improving used car retail market.
The data in this editorial looks at the market as a whole across all age ranges and fuel types.
This is key information that is critical to most sectors of the UK motor trade, whether they be OEMs, vendors or buyers.
The value of this data is increased significantly when it can be focussed on geographical area and on specific market sectors, and Glass’s Radar data enables us to analyse trends to a far more granular level.
In summary, it is evident that the used retail market is both healthy and looking to continue in this vein for the coming months.
As a used car retailer this should give a level of confidence that there are good times ahead.
A similar message must be taken by the vendors and the OEMs, although there are two key points that must be considered.
Firstly, the increase in trade volume due later in the year and secondly, there is the potential for new government austerity measures post summer recess that may impact on consumer confidence.
Ultimately, 2015 looks set to be another good year for new and used car sales and market intelligence will hold the key to the level of success.