Cox Automotive customer insight and strategy director Philip Nothard has warned used car retailers to “remain cautious” as the sector heads into an in certain period of winter trading.

Remarketing giant Cox reported that September had proved to be one of the wholesale vehicle market’s busiest months for conversions and price performance, with cap clean performance reaching 98.19% - a 1.94 increase on 2019. 

First-time conversions continued to reflect constrained stock levels, at 86.6% for September, which is 2.1% ahead of 2020 results, meanwhile, as the average age and mileage remained behind 2019 levels as retailers continue diversifying stock profiles.

But while demand for stock remained high in a market suffering from limited supplies, Nothard said retailers must remain mindful of the effect of the cost-of-living crisis and economic uncertainty on consumer confidence.

“Dealerships are advised to remain cautious, as they have been throughout 2022,” he said.

“Unfortunately, consumer spending power has not yet been restored and will likely be negatively impacted as we move into the winter months. 

“However, the used market offers a flicker of hope with neither prices nor demand likely to drop, whilst lack of supply remains.”

Nothard said that September's 4.6% new car registrations rise had come amid a backdrop of GfK consumer confidence index decline to a new low of -49 as "households grapple with surging CPI inflation and more expensive car finance costs".  

Consumer confidence could yet be further impacted by political issues, with Jeremy Hunt MP set to make his first speech as new Chancellor of the Exchequer this morning (October 17) ahead of details of a new fiscal plan on October 31.

Speaking to AM last week, Cap HPI director of valuations Derren Martin said that he had noted an air of caution about the used car market so far in October, with signs that retailers may hold-off from their usual annual rush to stock up their forecourts for January.

Despite the market headwinds, Cox Automotive reported that retained margins have continued to provide “much-needed light relief” in the sector.