Used car dealers experienced a ‘challenging’ first quarter with the majority, 69%, saying their margin had fallen year on year.
Compared to Q1 last year, 59% of dealers noted a deterioration in retail demand, 40% said finance penetration was lower and 60% said physical footfall had fallen, according to Philip Nothard, head of external relations with Cox Automotive.
The vast majority of dealers, 86%, said target pressures were resulting in higher levels of pre-registered cars hitting the market while 60% said the scrappage schemes on offer from carmakers were sucking sub-£2,000 cars out of the market.
The majority of dealers, 56%, are optimistic about economic conditions over the coming months although expectations of pressure on sourcing stock increased throughout Q1, according to Nothard.
The Cox findings on falling retail demand follows data from Dealerweb published earlier this month showing falling sales of used cars in February.
It said used car enquiries and sales both fell by 9% compared to February 2017. There were substantial falls in telephone and walk-in leads for used cars, which dropped by 14% and 15%, respectively.
In the wholesale sector Cox Automotive said the market was strong, especially for three-year old stock with up to 60,000 miles and ready to retail stock.
But high mileage and sub-standard vehicles requiring remedial work were finding it increasingly tougher to find buyers.
It said part-exchange volumes rose 17.5% in the March plate-change month compared to February.