MotoNovo Finance's latest used vehicle inventory report

• February was a record month for the number of vehicles held in stock by dealers
• 39% of stock-funded vehicles settled during February were on stock for less than 30 days- up from 27% in January
• Overall, vehicles were on stock for just 43 days.

That demand for used vehicles has accelerated, and they are selling more quickly; these are the key insights from MotoNovo Finance’s latest Used Vehicle Inventory Report.

Used stock funding provides a unique perspective on used car sales and buying activity because, in real time, a lender can see how much stock dealers are holding, how quickly it is being sold, and which type of stock is selling.

Dealers of all sizes right across the UK take advantage of MotoNovo’s broad range of used stock funding options, making the business one of the country’s largest and longest established used vehicle stock funders for dealers. The significant scale of stock funding data that we hold means that along with the technology and access to funding, MotoNovo’s Used Inventory Report enables dealers to benchmark their performance, complementing other resources.

The picture of increasing demand by retailers for stock and rapid stock turn, just 7% of stock fell into the over 120 days criteria, a figure which has been consistent over recent months is a clear indication of an active used car market. While it could be argued that stock turn is such that, for the right stock, dealers could be more ambitious in their pricing, the critical observation is one of market stability after last year’s used car value realignment, which is crucial.

The trends in used car values that we have seen since Covid-19 have been ‘dynamic’. The unprecedented rise in used value, which was sustained for far longer than could have been expected, arguably created a false landscape of vehicle values. This picture was further complicated by the emergence of EVs, notably Battery Electric Vehicles (BEVs), where initial low supply was met with relatively high demand, which artificially inflated prices. Last year, values for all vehicle types were realigned.

Today, we have greater consistency, and this stabilisation in vehicle values is a positive factor overall. Whether as buyers, sellers or residual value setters, dealers, customers, and funders have more certainty.

The emerging values for used vehicles are more closely aligned with historic depreciation trends. However, these may surprise customers, some of whom may have inflated value expectations for their existing cars. It is why it is so important that across the industry, we work to communicate and explain the emerging used vehicle pricing benchmark and the associated reasoning.

As always, nothing is certain, and the impact of the shift to EVs, fuel prices, rising insurance costs and location nuances will all affect used car pricing. However, as we move into a peak used car retailing period following the new car plate change, stocking days will be a crucial metric to demand, stock mix and profitability; I urge dealers to maintain a close eye on this number, which I am sure many will, and react to it in stock buying and pricing as appropriate.

Chris Rowthorn, Motor Sales Operations Director