Nearly new car prices are escalating in the wake of a shortage of new cars due to tougher emissions tests in factories.
Prices in the used vehicle sector are being artificially inflated post-WLTP as competition hots up amongst buyers for nearly new and ex-fleet stock according to Shoreham Vehicle Auctions.
And they are likely to stay this way until Spring 2019 as the used car market continues to thrive and manufacturers continue to iron out their WLTP challenges.
Shoreham Vehicle Auctions claims that as a result of the SMMT’s reported 20.5% fall in new car registrations in September there has been a noticeable increase in franchised dealer activity within the used car buying sector.
“Franchised dealers are quite simply short on stock and are seeing the used sector as a solution to improve their profitability following lower new car sales in 2018,” explained Alex Wright, managing director at SVA.
He continued, “Certain brands are finding it a challenge to source new vehicles post-WLTP and their franchised dealers are searching online and physical auctions country-wide for sufficient used stock for their forecourts.”
During 2018 more franchised dealers than ever have also been buying good quality two and three-year-old ex-fleet stock to keep their used forecourts full. With fleets being forced to extend lease terms as they have been unable to source new cars for clients, the challenge is clear.
According to Wright, the used car sector has seen a major shift in what buyers are sourcing at auction. With dealer groups buying more and paying more for nearly new and ex-fleet stock the independent dealers are finding it hard to compete with that buying power and are having to temporarily shift focus to lower specification and lower price cars.