Used car market settles down in Q3 after a rocky Q2

Thursday, August 1, 2019 - 08:58
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Daren Wiseman, Aston Barclay’s digital strategy director

After months of price rises in the used market across all sectors cars have become a depreciating commodity again in Q2 2019 according to the latest Market Insights report from Aston Barclay.

Brexit apathy, a rise in part exchange volume from the March plate-change and more fleet stock making its way into the market are some of the reasons the used market has seen three consecutive monthly used value book drops.

The market is now having to respond to used car depreciation with Aston Barclay reporting that only the late and low sector (cars up to 24 months in age) seeing prices rise from £14,243 in Q1 to £14,344 in Q2. Ex-rental stock is still in demand with most retailers, thus helping keep prices strong.

Average prices of ex-fleet stock fell by £288 to £9,233, while mileage fell by 2,776 miles to 51,245 miles. Ex-fleet replacement cycles remain at 42 months which still causes challenges with fleets as the used value guides continue to position a typical fleet car as being three years and 60,000 miles. This can cause a disparity between written down values and actual auction values.

Dealer part exchange prices fell across the board which caused headaches for sales managers as they keep their sales team up to speed with the moving used market to ensure they buy part exchanges at the right money and liquidate them quickly to maximise profits.

While new diesel car prices continue to fall, used prices remained stable at £7,511 in Q2 while petrol prices rose £100 in the quarter to £4,306.

For the first time for months sales of new hybrids fell in Q2 which has caused used demand and prices to increase. Average prices in Q2 were £13,636, down £100 from Q1.

“Q2 was the first quarter for some time where the used car market was quite unsettled. We have been working with our dealer, fleet and OEM customers to understand how best to work in these changing market conditions.

“This includes setting accurate reserves to increase first time sale rates,” explained Martin Potter, Aston Barclay’s group managing director.

“Q3 has settled down with increased conversion rates as vendors and buyers come to terms with the changing market.

“As we head towards August there are no indications of pre-reg activity due to the introduction of WLTP2, but we are watching this space for Q4 and into 2020 as manufacturers make decisions about these new regulatory fiscal penalties,” he added.

Aston Barclay’s new digital trends report tracks the changing face of used car buyer behaviour

Aston Barclay has released a new digital trends report that looks at the behaviour of buyers in the used marketplace.

This follows the successful launch of its Digital Solutions brand in January and the 16th release of its Buyer’s App this month (July) as it continues the roll out of its digital remarketing revolution.

During Q2 one-in-five (20.7%) used cars were bought online, while the rest were bought from Aston Barclay’s six physical auctions.

Vauxhall was the most popular used car brand in the auction hall in Q2 with 85.6% of cars bought physically and only 14.4% purchased online.

That compares with Mercedes where buyers bought more than one-in-three used cars (34.4%) online, consistently more than any other brand.

Unsurprisingly Mercedes buyers accounted for nearly 110,000 web views during Q2, more than double those received by Vauxhall, Audi and Volkswagen.

Total web views increased to 344,170 in Q2 compared with 265,157 in Q1 as buyers struggled to buy stock as vendor reserve prices adapted to three consecutive used vehicle book drops.

Looking at bid types Mercedes buyers racked up 7,168 online bids and 3,864 mobile bids in Q2, more than double their nearest rivals.

During the same period Ford and Vauxhall buyers topped the list of auction hall bidders, followed by Mercedes, Volkswagen and Audi.

Looking at model trends by bid type the Ford Fiesta was the most popular in the hall during Q2 followed by the Corsa and Golf diesel.

The Mercedes A class received the most mobile bids and the Ford Galaxy diesel the most online bids over the same period, aided by Addison Lee’s diesel MPVs continuing their healthy buyer following.

“We have been developing new digital products like the Buyer’s App that meet buyers’ ever-changing needs since 2017, and it’s nice to be able to publish our first digital trends report that tracks their changing behaviour.

“The report shows that buyers are using our online and mobile technology extensively with up to a third of cars from Mercedes now being bought online.

“We look forward to tracking these trends further over the coming months,” explained Daren Wiseman, Aston Barclay’s digital strategy director.

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