Auto Trader’s report reveals that in March, retailers missed out on potential profits of nearly £25.5m by pricing their stock below the true market value. According to the report, roughly 7,700 out of its 15,000 retailer partners advertised their cars below their current price. The average potential profit missed by each retailer was £3,300. Auto Trader’s Retail Price Index indicates that in March, the average retail value of used cars was £17,712, which is a 2% YoY growth on a like-for-like basis. Although the YoY growth rate of used car prices has been easing since April 2022 when it peaked at 32.2% YoY, March 2023 marked a reversal of this trend, recording a 1.3% YoY increase from February. Auto Trader attributed the acceleration in price growth to the ongoing challenges in used car supply (down -11% YoY in March) and the strengthening consumer demand (up 12% YoY).
Auto Trader’s data reveals that used car sales grew circa 9% YoY in March, translating into a 7% increase in sales in Q1 of 2023 compared to the same period last year. However, they were still down nearly 5% on pre-pandemic levels due to an ongoing shortfall in younger cars. Supply levels of 1-3-year-old and 3-5-year-old cars were down -22.3% YoY and -25.4% YoY, respectively, last month. Used cars took an average of 26 days to leave retailers’ forecourts in March, two days faster than in March 2022 and three days faster than in 2019.
Richard Walker, Auto Trader’s Director of Data and Insight, stated that used car prices and the market have gone from strength to strength in Q1 despite the negative newspaper headlines. He added that while other sectors remain subdued, the car industry is showing its resilience, and many retailers may be leaving profit potential on the table inadvertently. Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), also commented that it is encouraging to see an acceleration in price growth and consumer engagement on Auto Trader, and that dealers are confident in the continued strong levels of trading in Q2.
