How patience and product are key to used sales success

Article author: Cliff Deller
Position: managing director, Orchid Automotive

We are yet to see the long-awaited influx of vehicles into the marketplace as inventory levels at auctions and remarketing companies are at an all-time low. Truth be told, those vehicles just aren’t coming – at least not in any volumes and certainly not anytime soon.

All indications, combined with anecdotal feedback, led me to believe we will not see any major increase of used vehicle availability in the wholesale market for the remainder of the year.

So how are you going to replenish your stock? At the risk of repeating myself, the best source every time is from part exchanges and vehicles you can purchase from previous customers.

You should consider these vehicles very carefully before choosing the wholesale disposal route. Ask yourself, can I retail this car? Bought correctly and always using the science – and, of course, allowing for appropriate reconditioning costs etc, – these vehicles could become the key contributor to your vehicle acquisition strategy.

The on-going shortage of used vehicles in the marketplace continues to drive high sale prices and strong conversions for many inventory owners, which, in turn, supports residual values and reduces volatility in the used car sector.

Used car transactions

The UK used car market grew 7.2% in the second quarter of 2024, marking the sixth successive quarter of growth. Transactions have risen every month of the year so far, marking the biggest increase since 2016.

First half transactions rose by 6.8% year on year, with the market now just 3.0% below pre-pandemic volumes. YTD used car transactions were 3.93m versus 3.76m in 2023.

Meanwhile, used battery electric vehicles recorded their highest ever market share at 2.4%, as sales increased 52.6%. That’s their highest ever share – and up from 1.7% last year.

BEV vs ICE

What’s interesting to see is the realignment of values and subsequent retail prices of battery electric versus ICE now. The earlier EVs are incredibly good value at the moment: a quick search recently revealed a 2012 Nissan Leaf from less than £2,500. Or a 2014 Renault Zoe for £3,000. Obviously these cars won’t have the same range capacity as their newer counterparts – and some may have leased batteries (something to be aware of) – but still bring ownership of an electric vehicle within the realms of possibility for many buyers.

What was also surprising was a ’69′ plate Tesla Model 3 advertised for less than £11,700 and a 70 plate at £12,400.

We can also see price parity on New EVs versus their ICE cousins as OEMs strive to compete for buyers in a extremely competitive market sector. ZEV targets must be at the top of every manufacturer’s agenda and subsequently the retailers as well.

The new car market was down by 1.3% in August overall, but YTD remains up by 5.1%. Registrations of BEVs increased by 10.5% YOY and now represent 17.2% market share. To put this into context, it still a long way behind petrol (54.4%) share YTD, albeit reducing every month.

In terms overall winners and losers in the fight for registrations YTD, there are some surprising numbers: BYD registered 4,110 vehicles compared with just 213 in 2023. Jeep has seen amazing growth this year with 4,821 registrations, rather than the 1,880 last year. Jaguar too is also enjoying significant growth at 12,291 versus 8,170 and BMW 84,278, from 65,693 last year.