The common retail value of a used automobile in November was 3.8% decrease than a yr beforehand, Auto Dealer knowledge reveals, marking the third consecutive month of retail value decline.

It virtually mirrors declines being recorded in the used automobile wholesale market, the place Cap HPI just lately reported to AM that sellers have turn out to be extra conservative concerning the costs they’re going to pay and the amount of inventory they wish to maintain within the run as much as Christmas.

Auto Dealer identified that regardless of the headline decline, its knowledge reveals shopper demand stays strong and sellers are nonetheless promoting their inventory in good time, so it warns in opposition to slashing margins to present excessive reductions.

The difficulty is most acute for franchised vendor networks, due to higher availability of latest vehicles and This fall’s shopper provides.are tempting some customers.

Automobiles aged above five-years-old had been truly up 1.3% YoY final month, while these aged over ten years-old elevated 6.8%.

It’s a fall in retail costs amongst youthful aged cohorts pulling the general determine down. These vehicles aged as much as five-years-old recorded a -6% drop in November, on account of a mix of elevated provide over current months, in addition to growing stress from new-car offers, notably amongst electrical autos (EV).

This nuanced image is mirrored throughout completely different segments of the market. The common value of low emission autos was down -11.9% in opposition to November 2022; EVs in isolation, fell -21.1%. Their historically fuelled counterparts nonetheless, softened simply -1.8% YoY. It’s the same image at a model degree; while premium and tremendous premium vehicles dropped -6.5% and -3.6% respectively, the typical retail value of quantity manufacturers contracted simply -2.1%.

Auto Dealer’s knowledge reveals that demand, as decided by shopper engagement on its platforms, has elevated on final yr throughout all market segments, together with ‘practically new’ vehicles (these aged lower than 12 months previous), which have seen demand progress (39% YoY) outpace provide (29% YoY) for the primary time in over a yr. At a complete market degree, demand progress is up 9% on November 2022, marking a rise on the 6.8% recorded in October, in addition to the third highest fee recorded this yr.

With present ranges of shopper urge for food forward of the quantity of inventory coming into the used automobile market (up 2.8% YoY), Auto Dealer’s Market Well being metric, which assesses market profitability primarily based on provide and demand dynamics, rose from 4.3% YoY in October, to six.1% final month. It’s a substantial improve on the -11.3% decline recorded in November final yr, when the market was affected by the financial uncertainty and disruption brought on by the then Prime Minister, Liz Truss’ ‘Mini-Funds’, which fuelled a fast progress in inflation and rates of interest.

At the moment, the market faces much less uncertainty, and because of this, Market Well being throughout all however two segments have improved on final yr’s ranges, and consequently, so too has the velocity by which used vehicles are promoting, which at a complete market degree was simply 31 days. Unusually for this time of yr (when the velocity of sale usually slows between October and November), it was flat in opposition to the prior month. It’s additionally quicker than pre-pandemic norms; it took a median of 33 and 35 days for vehicles to promote in November 2019 and 2018 respectively. Additional highlighting the robustness of the used automobile market, Auto Dealer noticed 69.8 million visits to its market final month, which is a 12% improve on November 2022.

Regardless of the optimistic progress in Market Well being and the beneficial provide and demand dynamics, Auto Dealer’s knowledge signifies there’s been a current improve in re-pricing exercise, with retailers making broad value reductions throughout their forecourts. 16% of all vehicles being marketed on Auto Dealer had been priced under their market worth in November, which is a major improve on the already worryingly excessive 14% recorded in October and suggests retailers are leaving potential revenue on the desk.

Auto Dealer’s director of information and insights, Richard Walker, stated: “As we’ve been reporting for some months now, retail costs stay strong throughout segments of the market, demand is growing, and vehicles are promoting rapidly. I’d urge retailers subsequently, not to surrender potential alternatives primarily based on commerce knowledge alone, which solely present one facet of the story. Automotive patrons aren’t conscious of wholesale developments and are ready to pay what they suppose is a good value primarily based on the retail market worth, not what a retailer paid it for.

“With commerce and retail costs now not in sync, there’s a possibility for retailers in the event that they use an entire view of the market to information their choices. Each automobile has a retail value at which it can promote, so retailers ought to take a vehicle-by-vehicle method and use the fitting metrics to identify essentially the most worthwhile inventory for his or her forecourts. Greater than ever, the alternatives are within the element.”