Increasing numbers of used car dealers are turning to the classifieds and lower grade stock as demand continues to outstrip supply, according to Manheim.
The remarketing specialists’ latest dealer sentiment survey, which samples the view of around 240 retailers each month, found that 59% have adjusted their buying strategies to compensate for the difficulties faced when sourcing stock for their forecourts in the current market.
Just over 50% of the dealers polled by Manheim agreed with the statement ‘demand is currently outstripping supply in the used car market’.
A third of respondents said that they had resorted to buying from “additional or alternative sources”, meanwhile, with a fifth stating that they were now also self-sourcing through classifieds and one-in-ten admitting to buying lower grade stock than they normally would.
Philip Nothard, Cox Automotive’s customer insight and strategy director, said: “Our most recent data shows the used market is continuing to gain pace, with volumes and buyer activity increasing in October versus previous months.
“But despite this upwards trend, this dealer sentiment suggests that growth would be stronger still if more stock was coming through into the used sector.
“That dealers have maintained this growth despite stock availability challenges and increased competition in the lanes is testament to their resilience and ability to flex their business models to compensate.”
After sourcing their stock, 15% of car dealers told Manheim that they had been fast-tracking vehicle preparation to facilitate quicker stock turnover.
The same number say they’ve been traveling further than normal for stock.
Reflecting the upturn in competition reported in the wholesale market, a fifth of the dealers polled say they’ve been accepting lower margins for grade one or retail ready vehicles, supporting the view dealers are paying strong money for fast moving, in demand stock.
Nothard indicated that the situation may ease in Q1, 2019. He said: ““As we look towards Q1 and the prospect of a return to normality for the new car sector and a release of used stock into the wholesale market as fleets, manufacturers and leasing firms re-start their buying cycles following the WLTP-induced lull, I think we can be confident dealers are ready and able to take full advantage of every opportunity.”