Many of us have witnessed the used car market navigate countless peaks and troughs. The recent data from CarCondor paints a concerning picture – a 5.73% decline in used car sales for the Top 200 UK dealerships in April compared to March. While this follows a modest 2.01% increase in March, it suggests a potential reversal in the positive sales trend we’d hoped for.

This isn’t just a sales blip – it’s a financial squeeze. The revenue decline of 4.78% underscores the urgency for dealerships to adapt. But before we delve into strategies, let’s dissect the data to understand the challenges at play.

The Stock Squeeze and Its Impact

Segmenting the Slump

Location, Location, Location

Learning from the Leaders

Marsh Finance: Your Trusted Partner in Growth

Strategic Responses for Uncertain Times

Cars parked outside of a car dealership

The Stock Squeeze and Its Impact:

The significant 13.4% decrease in new used car stock acquired by the Top 200 dealers throws another wrench into the works. Sourcing high-quality pre-owned vehicles is proving difficult, limiting your ability to meet customer demand. This stock shortage seems to be impacting different segments of the market unequally.

A row of cars outside of a used car dealership

Segmenting the Slump:

Supermarket dealerships, known for their high-volume, low-margin approach, faced the steepest sales decline (14.49%). This suggests a need for a critical re-evaluation of their used car buying and pricing strategies. Perhaps a shift towards higher-quality, in-demand vehicles could offer better margins even with lower sales volume.

However, a glimmer of hope emerges from the data. Dealerships with a stock size between 1,000 and 4,999 units witnessed a marginal increase (0.08%). This could be attributed to their agility and adaptability in sourcing pre-owned vehicles. Perhaps a more curated selection with a focus on specific customer segments might be the key for them.

A handshake in front of a car signalling a new deal

Location, Location, Location:

Interestingly, dealerships with 10-99 locations bucked the trend with a 0.44% sales increase. This could be due to several factors – a wider geographical reach, the ability to leverage economies of scale, or a more personalised approach to customer service in each location. Exploring multi-location strategies might be a worthwhile consideration for dealerships seeking to expand their market reach.

A car salesman holding a tablet

Learning From the Leaders:

While the overall market faces challenges, some dealerships are navigating them more effectively. Arnold Clark continues to reign supreme with the highest average stock (19,156 cars). Analyse their stock management practices to identify potential optimisation techniques that can be implemented in your own dealership.

Similarly, the emergence of Skoda Karoq as the fastest-selling used car among the Top 200 dealers offers valuable insights. Consider diversifying your stock with in-demand models like the Karoq alongside reliable staples like the ever-popular Ford Fiesta.

A row of cars parked at a used car dealership

Marsh Finance: Your Trusted Partner in Growth

At Marsh Finance, we understand that navigating these market fluctuations can be daunting. That’s why we offer more than just car finance solutions—we’re your strategic partner in growth. Our competitive car finance options will attract customers and facilitate sales, but we go beyond the basics.

Our team of experts offer partners free compliance, operational, and sales efficiency consulting – a strategic partnership designed to help you sell more cars.

A man faced with uncertainty looking at question marks on the wall

Strategic Responses for Uncertain Times:

Here are some key actions you can take to address the current market volatility:

  • Diversify Stock Sourcing: Explore alternative channels beyond traditional auctions to find high-quality pre-owned vehicles. This could involve building relationships with independent sellers, exploring online marketplaces, or even partnering with rental companies looking to offload past-lease vehicles.
  • Embrace Data-Driven Stock Management: Employ data analytics tools to understand customer preferences in your specific market. This will allow you to optimise stock levels, minimising holding costs on slow-moving vehicles and ensuring you have a healthy inventory of the cars your customers are looking for.
  • Invest in a User-Friendly Online Presence: In an increasingly digital world, a user-friendly website and strong online presence are crucial. Showcase your inventory with high-quality photos and detailed descriptions, allowing customers to browse and research vehicles from the comfort of their homes.

These are just some of the strategies you can employ to navigate the shifting sands of the UK used car market. Remember, Marsh Finance is here to support you every step of the way. Contact us today to discuss how we can tailor our car finance solutions and strategic insights to help your dealership achieve long-term success.