Sellers are lacking out on £31 million in revenue as a result of under-pricing excessive demand inventory, in line with the most recent knowledge from Auto Dealer.

Throughout 8,000 retailers, round 47,500 vehicles on the enterprise on-line platform are listed beneath their retail market common, which means that  sellers are leaving on common round £4,000 of revenue on the desk – regardless of the robust underlying well being of the used automotive market and development in demand.

Auto Dealer’s knowledge reveals that shopper demand on its platform, decided by the quantity of searches and advert views, has elevated 6.9% year-on-year (YoY) over the course of the primary two weeks of 2023.

Equally, the variety of cross platform visits to Auto Dealer since January 1 has reached over 40 million, equating to a 6.2% uptick on the identical interval final yr.

While demand is powerful, provide at a complete market stage stays constrained nonetheless with the quantity of obtainable inventory rising simply 0.4% in January. These beneficial market dynamics are leading to Auto Dealer’s Market Well being metric, which displays the potential alternative available in the market, rising 6.4%.

These robust market fundamentals, together with demand ranges outpacing provide, would traditionally have maintained steady retail worth development. Nevertheless, in line with the Auto Dealer Retail Worth Index, the typical used automotive retail worth on the mid-month level is £17,108, down -6.2% YoY on a like-for-like foundation, and -0.4% month-on-month.

It marks the fifth month of contraction, and though the preliminary softening was as a result of elevated provide in youthful aged cohorts and the drop in used EV values, the accelerated fee of contraction has been fuelled by inventory underpricing, pushed by current traits in commerce costs. 

Auto Dealer’s knowledge suggests continued nuances throughout all facets of the used automotive market. On account of the continuing de-fleeting of round 750,000 electrical autos bought since 2020, the typical worth of sub three-year-old vehicles has dropped -8.4% YoY to £28,485.

Used vehicles greater than 10-years-old are nonetheless recording constructive worth development, with 10–15-year-old autos up 4.7% YoY to £6,592 and 15+ autos rising 3.5% to £5,728. Vehicles aged 3-5 years outdated are down -7.8% to £19,420.

It is a equally combined image when it comes to provide and demand. While provide is up 22.7% and demand up 27.6% for vehicles aged as much as a yr outdated, giving a Market Well being metric of 4%, the availability of vehicles aged 1-3 years-old has dropped -18.9% whereas demand is up 12% on final yr’s ranges, fuelling an enormous 38.2% improve in Market Well being.

In such a nuanced market, and to keep away from leaving potential earnings on the desk, it’s vital to comply with car stage retail market knowledge to supply, worth and drive efficiency from each unit of inventory.

Regardless of the under-pricing exercise, which seems to be slowing – the 47,500 autos at the moment being marketed beneath their potential market worth is down on the 51,633 initially of the yr – Auto Dealer’s analysis signifies constructive retailer sentiment for the yr forward.

In a survey carried out this month, almost three quarters of the 1,649 retailers acknowledged they anticipated to carry out higher than final yr (58%) or the identical (13%). In the identical analysis, only one in 10 retailers indicated shopper demand can be a serious problem in 2024.

The most important problem indicated, at 29%, was the financial local weather, and consumers’ affordability. Reassuringly, nonetheless, in a separate piece of shopper analysis, over 80% of in market automotive consumers visiting Auto Dealer in December, acknowledged they had been not less than as assured in having the ability to afford their subsequent automotive as they had been final yr.

Commenting, Richard Walker, Auto Dealer’s knowledge & perception director, stated: “Demand is powerful, vehicles are promoting rapidly, and early indicators level to an uptick in transaction ranges, so retailers ought to really feel optimistic for the yr forward. Though we’re seeing a slight slowdown within the quantity of vehicles being underpriced, it stays at an alarmingly excessive fee. With these beneficial market dynamics, commerce and retail costs being out of sync can symbolize a chance – I strongly encourage retailers to not miss it.”