ABM Q4 - Flipbook - Page 8
FEAT U R E
USED CAR MARKET
Motormorphosis
Dylan Robertson on the changing used car market
M
uch has been said about
the new car market as it
stumbles back past two
million annual sales, with
the ZEV Mandate and
Chinese brands to deal
with along the way.
But every new car
eventually becomes
a used one, and many of the factors
at play have had the inverse effect
on the used market. Low EV residual
values have been a pain-point for OEMs
and leasing firms, but have driven
considerable consumer interest in the
used market, for example. Equally, lowpriced Chinese cars have dragged buyers
away from used cars altogether.
A mixed picture
Autotrader reports that used car sales
increased around 1% year-on-year in
July, building on two already strong
years. Demand is strong too, with the
average used car selling in around 30
days. Performance, however, varies
widely across fuel type, vehicle age, and
retailer type.
Marc Palmer, head of strategy and
insights at Autotrader, says: “It’s not
the same for every type of retailer.
Anecdotally, franchise retailers, certainly
in recent months, have seen a pickup in
volumes versus last year.
“Independent retailers, certainly in the
older parts of the market, are also up
on transactions, supermarkets a bit less
so. Things are a bit more difficult in the
supermarket sector than they were a
year ago.”
Supermarkets have been hit by a range
of factors, namely weak performance
of three- to five-year-old premium cars,
a forecourt staple. Prices of these cars
have increased, pushing them out of
reach of typical buyers, who have either
turned to older cars, non-premium
cars, EVs, or new cars, which have been
heavily discounted.
8
AUTOMOTIVE BUSINESS
Q4 2026
This provides an interesting opportunity
for dealers. In 2022, zero- to fiveyear-old cars accounted for 52.4% of
the market; in 2026 so far, they have
accounted for 44.2%, according to Brego.
Vehicles aged 11 years and up have
grown their share of sales from 17.1% to
24.1% in the same period.
Savvier dealers have started to pivot,
recognising that buyer demands are
diverging from their bread-and-butter
stock profile.
John Smyth, director at Swansway
Motor Group, says: “There’s strong
demand for used cars, but customers
are still looking for vehicles that meet
their individual criteria. It isn’t simply
a case of customers moving towards
older vehicles, it’s about finding the right
combination of age, mileage, condition,
specification and price for their budget.
“We’re seeing customers become
increasingly conscious of value,
particularly with the cost of living and the
price of new vehicles. That means there’s
a strong opportunity in the used market,
but dealers need to make sure they’ve
got the right stock available to meet a
wide range of customer requirements.”
Businesses are not immune to the
economic pressures. Budgets are
pinched, new vehicle prices are rising,
and something has got to give.
Tom Mansbridge, senior technical
consultant at Jaama, says: “The financial
case for used vehicles is strong, with
lower acquisition costs and reduced
depreciation exposure freeing up budget
elsewhere. Used EVs can strengthen
that case further, provided buyers are
confident about battery health and
protected against major replacement
costs through suitable warranty cover.
“But those benefits only hold up if the
vehicle is properly vetted at purchase
and then actively managed on fleet.
A used vehicle bought on the back of
good data, supported by clear warranty
coverage and maintained proactively
