The Attraction Of The Older Model

Once again retailers will have to cast their net wider as the used car parc declines as a result of fewer vehicles sold during the pandemic.

Meanwhile, new car registrations for 2025 are expected to remain stable. According to latest Society of Motor Manufacturers and Traders (SMMT) figures, registrations are expected to fall by -0.2% with 1.949 million units this year. Cox Automotive’s Insight Quarterly for the first quarter of this year provides a slightly more optimistic outlook with its moderate baseline scenario of 2,003,225 new car registrations by the end of 2025, up 1.5% year-on-year. Its downside scenario though is 1,714,507 units (-13.1%).

Whilst predictions indicate a buoyant used car market for retailers, much like 2024, sourcing vehicles will need to become increasingly scientific with the right mix of vehicles on forecourts that reflect a dealer’s portfolio of customers.

Whilst it is no longer uncommon for the franchised network to retail vehicles between five and ten years old, it is likely this will become far more mainstream. Driven partly by the increased reliability of vehicles, this trend will also be boosted by the reduction in younger used vehicles, the impact of which will be felt much harder this year.

Some of the growth in retailing older vehicles will be generated naturally by an increase of older part exchanges but many retailers will be looking to ramp up this segment significantly.

Autofinity CEO Andy Whitehair said: “The seven-ten-year age group of vehicles has routinely been identified as ripe for development over the past decade or so but this year it could take off as a direct reaction to fewer vehicles in the used car parc.

“In the past few years many motorists have retained their vehicles longer due to the cost-of-living constraints and lengthening reliability of vehicles. Consequently, retailers will be part-exchanging more older vehicles and that will naturally create its own market. However, forward-thinking retailers are actively developing this sector.

“Seven- to-ten-year-old cars can be profitable providing they are in good condition and are sought after models whilst they are often highly desirable for consumers with their corresponding lower price tags. Buyers can also be swayed by the added confidence that often comes with purchasing from a franchised dealer.

“The difficulty is sourcing such vehicles and once in group stock, keeping track of their progress through the prep process and balancing the cost of any parts and other repair work with profitability which can be off-putting.”

Autofinity’s ViHUB pools vehicle data to create one rich source of information and automatically uploads amendments made via its dashboard to online channels. Auto Trader Connect integration means the vehicle rating can be viewed on the same dashboard enabling rapid pricing to market without switching applications. By combining with its new ViSOURCE, retailers can further streamline used car processes. ViSOURCE aggregates all wholesale data from multiple vendors into one system making it easy to compare vehicles, prices, spec and condition.