DEALER stock volumes received a welcome boost in October, as used cars sold faster than at any point this year and the rise in advertised price continued to stabilise, according to the latest Market View from eBay Motors Group.
With consumer demand for used cars still riding high, the average stock volume per dealership advertised on Motors.co.uk increased by 9% to 40.4 units, boosted by part-exchanges entering the market following the September plate-change and following two months of decline.
These improved stock inventories were led by franchised dealers where averages per site increased 17% month-on-month to 60.6 units, followed by supermarkets where averages increased 11% to 309 units. Independent dealers saw a more modest increase of 2% to 37 units.
Despite these improvements, average stock levels remained 10 units down year-on-year. With more stock on physical and digital forecourts, used cars averaged just 33.4 days to sell, two full days faster than September, marking a new record for the year.
The fastest sellers were achieved by supermarkets, averaging 30.5 days, followed by franchised dealers at 31.8 days. However, independents recorded the only month-on-month improvement with days to sell dropping from 44.7 to 41 days.
Cars priced between £10,000 to £15,000 were the fastest sellers, averaging 28 days in stock, suggesting an influx of three year old cars as a result of the September plate-change.
The average price rise for the top 50 makes and models on Motors.co.uk stabilised in October increasing just 0.6% to £13,598. However, this marked a new high for the year with the average advertised price of a used car increasing 12.6%, or £1,527, since January.*
Dermot Kelleher, Head of Marketing and Research at eBay Motors Group, said: “October proved to be another strong month for dealers, with many benefiting from the combination of increased used car inventories, strong prices, high demand and fast sales.
“Once again dealers worked hard to keep on top of demand while paying high prices to restock. The challenge over the coming weeks will be to retail these cars profitably. While average advertised prices of the top 50 leading makes and models on Motors.co.uk were still rising, our Market View shows the rate of increase has slowed down.”
Although the market is entering a period of seasonality, eBay Motors Group expects dealers to continue to see strong demand from new car buyers switching to used.
“The widely reported new car supply issues around the semiconductor shortage is about to be compounded by the global shortage of magnesium, a key raw material in car production. As a result waiting times for new cars will increase further, prompting more buyers to look for alternatives in the used market,” said Kelleher.
The top 10 fastest selling makes and models on Motors.co.uk was dominated by MPVs with the Ford Grand C-Max averaging just 18.9 days on forecourts, followed by the Vauxhall Zafira Tourer (19.6 days), Ford Galaxy (20 days) and Citroen C4 Grand Picasso (21 days).
The ongoing pressure on supply is demonstrated by the rising value of the mainstream Ford Focus with average prices for three year/30,000 mile examples increasing 7.7% since September to £18,575, a year-on-year rise of 28.7%.
Diesel engined cars remained the fastest sellers by fuel type, averaging just 31.6 days to sell, with petrol models averaging 34.6 days. However, in a month marked by fuel shortages alternative fuelled cars sold significantly faster than 12 months ago with hybrids averaging 33 days, compared to 52.5 days in October 2020, and electric cars averaging 36.8 days, compared to 43 days a year ago.
The rise of electric vehicles (EVs) could help to improve the overall used car buyer experience and even accelerate the move to online sales, according to Startline Motor Finance.
Gregor Sutherland, Chief Operating Officer, said the fact that EVs had fewer moving and wear parts that their internal combustion engine (ICE) equivalents meant that there was simply less to go wrong, to the benefit of the consumer.
“Really, the traditional, time-honoured test drive is all about the consumer making sure that the car works. In 2021, the vast majority of used cars are sold in good, operable condition, but there is a kind of hangover from a time when the condition was much more variable.
“Going forward, the chances that a used EV doesn’t work in the same way as an ICE car might fail because of a worn gearbox or a clutch, is very low. The main issue, over time, will be about whether the battery retains charge over time, but there is already evidence that this will not prove to be the kind of issue that was once feared.
“All of this means that, in general, any EV purchase can be approached with more confidence than an ICE car. If there are any problems, they are likely to be visible and there is probably not going to be the kind of general mechanical problems that you find emerging over time.”
Sutherland added that, as consumers became more cognisant of this idea, it could also help to accelerate more remote, online car purchasing.
“By following a few simple steps, such as ensuring there is a provenance check, positive dealer reviews, a high quality online video for viewing and a warranty, you are probably going to be able to buy almost any EV online with confidence.
“Of course, some people will always, we believe, want to see the vehicle in person because they want to examine factors such as whether it fits their family lifestyle, or to check that the driving position is comfortable, but these are likely to become fewer.
“Within our dealer portfolio, used EV activity has been very low so far but we are seeing interest start to ramp up significantly now and are planning to integrate these vehicles into our product line-up. We hope to be able to announce something soon.”