In September Pickles released their quarterly report on the used vehicle market which covered the last quarter of the financial year (April to June 2018).
There were no surprises as the prices soften into the cold winter months and the reasons for consumers to purchase a new car increased as manufacturers chased volume at the end of the financial year.
As manufacturers push dealers for more sales the number of trade-ins increase giving them access to stock which impacts wholesale auction volumes. When this is combined with low interest rates, extended warranties and additional ‘cash back’ style offers; clearance rates and prices are going to head south.
Fleet and government vehicles declined in several key areas. Compared to the same time last year the clearance rate dropped from 50% to 47% and the average days to sale increased from 29 to 32. And the prices declined against the Glasses estimate in Auction and Fixed Price which reduced the overall average sale price.
The PicklesGo (fixed price sales) continued to increase in volume as vendors looked for opportunities to increase sales prices. Pickles also introduced a ‘7-Day Buy Back Offer’ which several fleet companies used to give buyers more confidence in their purchase.
Commentary in the report confirmed what many industry people are saying about the economy and consumer spending.
“Likewise, private buyers are also under pressure due to the increasing costs of living. It has been well documented that the increased cost of electricity, health, tolls, fear of interest rate rises and high debt levels have all impacted on the con dence of people to spend. Upgrading or purchasing a vehicle is low on the priority list for most. The new vehicle market also re ects this sentiment being down on expectations”.
The forecast from Pickles is the worst conditions are over and they already started to see improvements in July so the market should recover slowly for the remainder of the year.