Dealer Auction’s monthly Retail Margin Monitor has revealed that profit margins remain strong despite the cost-of-living crisis and supply issues.
In August, the Land Rover Discovery 4 registered in the data for only the second time this year, returning once again at the number one spot, with the highest average retail margin ever recorded at £5,100.
Land Rover dominates 40% of the table, holding the top four places for the highest average retail margin – at number two, Land Rover’s Range Rover Evoque (£3,780), followed by the Discovery Sport (£3,610) and the Freelander 2 (£3,100).
Dealer Auction’s Marketplace Director Kieran TeeBoon commented: “This is not a complete surprise considering Land Rover has successfully held top ranks for several months now, proving dealers aren’t shying away from sourcing premium brands, and that there is still considerable profit to be made on the right vehicle.”
Contrary to recent reports of dealers changing the vehicles they stock to prioritise smaller, more affordable products, Dealer Auction’s data shows strong retail margins across the board. From what we can see, the rising cost of living is not deterring dealers from sourcing a diverse range of stock, especially as they are still experiencing a good return on the premium brands.
At brand level, Land Rover appears as the number one make, with a £3,780 average retail margin. Auto Trader reports that ‘sales remain healthy where stock is readily available’ despite supply constraints across the used market,1 serving as a reminder to always review and replenish your stocklist.
TeeBoon concludes: “The current market uncertainty is unavoidable. But there are readily available tools that dealers can utilise to ensure each asset brings them the maximum profit. Ultimately, no one knows a business better than the dealer themselves, but using localised data such as the Auto Trader Retail Rating can support and confirm your professional instincts.
“When it comes to vehicle remarketing, time is money. So, whatever can be done to speed up the process will have an impact on the bottom line – ensuring a diverse list and affording dealers the largest possible profit.”
Richard Walker, Data & Insights Director at Auto Trader, commented: “Despite concerns or speculation of a market in decline, levels of consumer demand remain robust and above pre-pandemic levels, and so for retailers who arm themselves with the right information, there’s plenty of profit opportunities. Our data shows that the recent decline in used car sales is heavily linked to the availability of stock; where available, sales are healthy – in the under five-year-old age cohort, stock levels dropped 19% in Q2 of this year against 2019, and sales followed suit seeing a 24% dip. However, in the over five-year-old age bracket, where stock levels were up 14%, sales saw a 15% increase. Highlighting the healthy level of consumer demand in the market, we saw a 27% increase in advert views for cars aged over five years on our marketplace compared with August 2019. It’s vital retailers are constantly reviewing their stocking and pricing decisions based on accurate data to ensure they’re getting the very best margins available.
“Similarly, and reassuringly, our data shows that used car values are following seasonal patterns on a month-on-month basis, and there are no indications that prices are softening beyond what we would expect.”
About Dealer Auction
Dealer Auction is the UK’s smartest and busiest automotive digital wholesale marketplace. We give buyers and sellers more choice, better insight and greater margin. Dealer Auction is an independent company, created through a joint venture between Cox Automotive and Auto Trader. For more information, visit www.dealerauction.co.uk.
Launched in January 2022, Dealer Auction’s Retail Margin Monitor tracks the highest margins seen on used vehicles with a significant number of units sold under the £25,000 retail mark, sold on the platform’s open network the previous month. The September 2022 edition analyses data from 1 to 31 August 2022.
Sources:
1 https://plc.autotrader.co.uk/press-centre/news-hub/fastest-selling-used-cars-june-2022/
