24 Jun, 2024

Stability’s back for used cars, says Vertu Motors, but new car retail looks uncertain

OEMs and franchised dealers face a daunting task to deliver sales mix and volume expectations in the new car market as many private buyers find young used cars much more attractive thanks to recent price drops, according to Vertu Motors, one of the biggest motor retailers in the AM100.

Its latest trading statement notes that after falling used car prices have stabilized, Vertu has actively worked to increase the turnover of used vehicle stock and reduce overall inventory levels. As a result, there has been an improvement in gross profit per unit from used vehicle sales in recent weeks.

Manufacturers selling new vehicles in the UK face challenges in managing the mix of internal combustion engines (ICE) and battery electric vehicles (BEV) due to ambitions to reduce emissions. This may lead to disruptions in supply and pricing as manufacturers strive to comply with regulations.

High prices of new vehicles, especially electric ones, have dampened retail demand, leading some customers to opt for used vehicles, which now offer more attractive prices after the market correction, it said.

Vertu said it is currently focused on navigating through this period of market adjustment, considering factors such as high interest rates and industry trends,

1 min read

Good News for Car Shoppers: Vehicle Prices Are Dropping

The AutoTrader Price Index is showing a drop in car prices, signifying the first time new car prices have declined month-over-month since February 2021, while used car prices continue to decline as well.

In December 2023, the average price of a new vehicle stood at $67,259. That’s up a substantial 14.2 per cent from the same month a year before, but the figure has been slowly and steadily falling. Prices were down 0.4 per cent in October, 0.1 in November, and 0.3 per cent in December after reaching record highs in September.

Find a Great Deal on Your Next Car

The slow price decline is a result of a new-car market still trying to catch up with pent-up demand from 2020 to 2022, said Baris Akyurek, AutoTrader VP of Insights & Intelligence. AutoTrader estimates that 1.3 million fewer new vehicles were sold during that period. But, Akyurek said, new car inventory levels are now trending upward. This is resulting in softened pricing for new and used models.

“There are a lot of great deals to be had in the market,” he said in his report.

Used vehicle pricing reached an average of $36,863. That’s up 1.7 per cent from December

1 min read