The average marketing price of used cars remained flat in August as stock volumes continued to dip and days to sell improved, according to the latest eBay Motors Group Market View.
Following six consecutive months of small declines, prices stabilised at £16,630, a month-on-month (MoM) rise of 0.1%, equating to £11. Prices remain 9.6% up on last year.
Car supermarkets led the increase with prices up 1.2% to £16,895, followed by franchised dealers up 0.7% to £20,352, while independents dropped 0.4% to £13,967.
Lucy Tugby, head of marketing at eBay Motors Group, said: “August is always a difficult month for dealers as buyers’ thoughts and budgets turn to holidays. However, they should be reassured by the continued stability we’re seeing in used car pricing and improved days to sell.
“The coming months are set to be more challenging as car buyers’ factor in the impact of inflation, rising interest rates, the increased energy cap and the Bank of England forecasting a recession.”
Car retail businesses have been told to focus on gross profit and cutting expenditure as a period of ‘stagflation’ is ushered in by sustained inflation and rising unemployment.
Stock volumes dropped from 51.9 units in July to 47.6 (8.4%) and have been in decline for five months since peaking this year at 57 units in April.
The shortage of stock was felt across all three dealer sectors: car supermarkets (-6.4%), franchised (-8.5%) and independent (-6.7%).
Meanwhile, days to sell improved MoM from 38.3 to 35.6 days, led by franchised dealers down from 34.4 to 31.3 days, followed by independents down from 46 to 44.9 days. Car supermarkets remained unchanged at 28.5 days.
Days to sell decreased the most for vehicles priced between £10,000 and £20,000.
The slowest sellers were at the top and bottom of the price spectrum, with cars priced less than £5,000 taking 42.2 days; £5,000 to £9,999 taking 43.4 days; and those over £40,000 taking an average of 40.4 days.
The fastest selling cars by fuel type were electric vehicles (EVs), averaging just 28.2 days on forecourts, although they accounted for just 1.1% of dealer listings.
With fewer new cars coming into the used market, dealer listings are increasingly weighted towards older stock with nearly a quarter (24%) of all cars advertised in August aged between six and 10 years old and accounting for a third of all views.
eBay Motors said that despite ominous headwinds, opportunities will still exist and dealers will need to be smart in their inventory and marketing approaches.
Tugby added: “The September plate-change will provide a welcome, albeit suppressed, influx of trade-ins and end of contract PCP cars. And dealers who maintain a strong online presence over the coming months will know that anyone searching for a car, especially older ones, is more likely to be a hot prospect than a casual browser.”
A growing divide in the used car sector is seeing values decline among older vehicles in poorer condition as retailers remain ‘laser focussed’ on fast selling stock, BCA has said.