Marked decline in dealer used car market optimism, shows Startline Used Car Tracker

01 Jun 2022

There has been a marked 21% fall - from 33% to 12% - in dealers who are optimistic about the used car market compared to last month, as well as a parallel 12% rise - up from 24% to 36% - in those who report feeling pessimistic.

•    21% fall in dealers who feel optimistic about the used car market compared to last month – and 12% rise in those who are pessimistic
•    Weakening perception of the used car market, prices and motor finance availability behind the trend, dealers report
•    76% of dealers also say that used car prices have now finally peaked

The new monthly Startline Used Car Tracker shows that even dealers who remain optimistic believe conditions have worsened – with factors mentioned including a 22% drop (down to 0%) in those who agree that the market and prices are strengthening and a 6% reduction (down to 33%) who agree motor finance availability is improving.


Among pessimistic dealers, 79% (up 17%) agree there has been a weakening in consumer confidence, 26% (up 11%) agree there has been a strengthening in market and prices – and 11% (up from 0%) agree that motor finance availability is weakening.


Interestingly, respondents in both the optimistic and pessimistic camps say stock supply is improving. Optimistic dealers agree that supply is strengthening (up 22% to 83%) while there has been a 19% fall (to 42%) among pessimistic dealers who say supply is weakening.


In a related question, 76% of dealers now agree that used car prices have peaked and some kind of market readjustment is underway. Of this group, 84% say that supply is gradually improving and moving closer to demand. However, a significant percentage (67%) of the 24% who don’t believe prices have peaked say that supply remains poor compared to demand.


Paul Burgess, CEO at Startline Motor Finance, said: “Over the last month, it has become ever-clearer that we are seeing a deterioration in the general economic situation thanks to factors including the war in Ukraine, rising prices and political uncertainty. This has now started to feed through into how dealers see the next few months shaping up and there is no denying that 21% is quite a marked fall in dealers who feel optimistic.


“The one bright spot is that there seems to be widespread agreement that the stock supply situation is getting better. This has obviously been a difficult area for dealers for some time now, so it is good to see that some improvement is taking place.


“From a Startline point of view, reports that availability of motor finance is weakening are interesting. It could be that some lenders are tightening their criteria and this may be affecting the amount of business that dealers are able to write.”


The Startline Used Car Tracker is compiled for Startline Motor Finance by APD Global Research, well-known in the motor industry for their business intelligence reporting and customer experience programs. This month, 297 consumers and 54 dealers were questioned.