Why the financial climate should be guiding the cars you sell

• Used car prices have increased 21.8% since April 2021 – Office for National Statistics
• Diesel costs hit a record high of 147.94p per litre, on 1 November, a week after petrol hit a new peak of 144.35p per litre – RAC and AA Data
• Energy prices are expected to keep rising for the next 18 months – Scottish Power

All of these crucial pieces of data are feeding into inflationary pressures that, according to the Bank of England’s new chief economist, could exceed 5% early next year. Such a figure could see inflation overtake the ONS’ expectation for the underlying growth in real average wages. Rising inflation has the potential for an increase in interest rates, it all has implications for used car stock selection. 

Typically, consumers have a clear idea of their budget when it comes to purchasing a used car; however, rising inflation is set to impact their budgeting processes in a manner many may not have experienced. An adjustment to a dealer’s stocking mix, which has to an extent already been forced by stock shortages, and the use of finance to illustrate monthly costs to car buyers are steps dealers can take now to meet the needs of consumers for a car they can afford as prices across the economy rise.

By Karl Werner, managing director, MotoNovo Finance