The CEO of Motorpoint – Britain’s largest independent retailer of nearly new cars and vans – has reacted with caution to used car sales data published last week by SMMT (Society of Motor Manufacturers and Traders), saying used car dealers are not enjoying the purple patch the figures seem to suggest.
SMMT’s data shows a 5.1% increase in used car sales during the first quarter of 2022, with sales of pre-owned electric models more than doubling during the same period. But Mark Carpenter, Motorpoint’s CEO, worries the figures paint an overly optimistic picture and warns that many used car retailers still face critical business conditions as unprecedented market turbulence and unpredictability continue to take hold.
Carpenter said: “There’s a perception out there that used car dealers are making money hand over fist at the moment and all we hear in the media is talk of high prices.
“But this price inflation has been caused by a shortfall in supply that’s seen half a million vehicles come out of the supply chain in the first three months of the year.
“Sure, prices are around 30% higher than they were a year ago but prices have plateaued and are beginning to ease off. Additionally, for the first time since COVID, we’re seeing normal levels of depreciation returning, with stock typically losing between 1.5% and 2% of its value per month.
“Additionally, the way these latest figures are presented gives a bit of a false positive. The used car market may be up 5.1% in Q1 of 2022 but it’s still down 12% on 2019 pre-pandemic levels, while the new car market is down 40%. Combined, that’s a fall of more than 529,000 cars changing hands.”
He added: “Rather than seeing SMMT separate out new car registrations and used car sales, I think it would be better to combine the data as the two are intrinsically linked. That would be a much more useful way of looking at overall market health.
“The important thing is that people are still buying cars and it doesn’t really matter to most consumers if they buy brand new or nearly new.”