Dealers remain positive about market though supply worries remain, first Startline Used Car Tracker shows

03 May 2022

Dealers remain positive about the prospects of the used car market despite gathering economic pressures, according to the very first monthly Startline Used Car Tracker.

  • Dealers are positive on balance about the used car market – 33% are more optimistic than last month compared to 25% who are pessimistic
  • Stock supply remains the number one challenge for the future – mentioned by 70% of dealers
  • 22% say that consumers are more likely to buy a used car than new compared to last month – against 18% who say less likely

In total, 33% who responded to a survey from the motor finance specialist said they were more optimistic than last month, compared to 25% who were more pessimistic, while the outlook was unchanged for 43%.


Interestingly, the reasons chosen by both dealers who are pessimistic and those who are optimistic are broadly similar. Among positive dealers, factors that are perceived as strengthening include stock supply (61%), motor finance availability (39%), market and prices (21%) and consumer confidence (17%). Conversely, those who are pessimistic see stock supply (53%), consumer confidence (52%), and market and prices (13%) all weakening.


Different sentiments are also revealed over whether dealers believe consumers are more likely to choose a used car over new this month - with 22% agreeing, 18% disagreeing and 60% unchanged.


Factors mentioned by dealers who said more likely include the new cars consumers want not being available (92%), new car prices having risen (39%), consumers not being able to afford a new car (15%) and used cars offering better value than new (8%). Those who were less likely chose used car prices having risen (70%), the cars that consumers want not being available used (30%) and new cars offering better value than used (10%).


When asked about the biggest challenges facing used car retailing for the future, stock availability was by far the most common response (70%) from dealers, followed by increasing compliance requirements (46%), growth of mobility solutions (35%), finance availability (33%), uncertainty over ICE future values (30%), need for increased transparency and processes (28%), changeover to electric vehicles (26%), emergence of agency model (15%) and a reduction in the desire for car ownership (11%).


Finally, dealers were asked whether they felt the pandemic was over as far as used car buyers are concerned with 53% choosing yes and 29% no. There was an equal split over whether this would affect consumer propensity to buy with 20% saying both yes and no, and 53% saying the market was at a high and would remain unchanged.


Paul Burgess, CEO at Startline Motor Finance, said: “This is our first Startline Used Car Tracker and we could hardly have asked for more interesting results. After a long period of buoyancy, it indicates there is divergence in how some dealers view the future prospects of the market alongside a core who foresee a more stable picture.


“This is attitudinal research, so it is very much a measure of sentiment, and what is fascinating is that factors such as stock availability and consumer confidence are being seen quite differently by different dealers. Of course, it is entirely possible that all of these perceptions are correct, based on individual experiences. The used car market is not a monolith and, given current economic headwinds, dealers operating in the mid-lower market may well be seeing different conditions to prestige retailers, for example.


“The Tracker will ask the same core questions every month – alongside some topical additions – and we’re looking forward to seeing how the results develop over time. Our hope is that our findings are of interest and use to the used car sector as a whole.”


The Startline Used Car Tracker is compiled for Startline by APD Global Research, well known in the motor industry for their business intelligence reporting and customer experience programs. This month, 301 consumers and 55 dealers were questioned.


Founded nine years ago, Startline is a flexible motor finance specialist and employs 170 people at its Glasgow headquarters. It works with around half of the UK’s top 50 franchise dealers by turnover as well as 70% of the top 50 independent car retailers, and currently accounts for more than 2% of the UK used car motor finance sector by volume.