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Retail Margin Monitor – Dec 2021

By February 4, 2022February 23rd, 2022No Comments
Used Volvo XC70 estates are the largest retail margin generators in December 2021, with SUVs performing strongest overall

According to data from Dealer Auction’s new monthly Retail Margin Monitor, the used vehicles attracting the biggest retail margins on its platform in December 2021 were SUVs – making up six of the total top 10.

Dealer Auction, which is the UK’s busiest digital wholesale marketplace, has created its monthly Retail Margin Monitor to identify the highest retail margins seen on used vehicles. It tracks models sold on the platform’s open network each month.

Speaking about why it launched the retail margin tracker, Dealer Auction CEO Le Etta Pearce said: “Competition for stock has intensified during the current volume issues, and dealers are looking for smarter ways to curate their forecourts and extract maximum value from their stock. Our monthly Retail Margin Monitor is designed to support dealers with an indication of the models that are currently selling with the best retail margins.

“We want this to be a springboard for dealers – to encourage them to dig deeper into the data and insights available to them to ensure they’re getting the very best profits possible.”

This result will no doubt be expected, given the current popularity of SUVs and crossovers; however, there were some surprises – with an estate and two sports cars making up the top three spots. The Volvo XC70 estate topped the list with an average retail margin of £2,700, with the Mazda MX-5 and Mercedes-Benz SLK sports cars hot on its heels.

These top performers may come as a surprise to some, given the recent decline in popularity of estate vehicles, and because sports cars (particularly convertibles like the MX-5) are not commonly associated with winter purchases. But, according to Dealer Auction, this not only demonstrates how fast today’s market is moving, but crucially, why accurate and real-time data is essential to ensure forecourts reflect it.

Dealer Auction’s Sales and Marketing Director, Sarah Marley, commented: “These high retail margins for the Volvo XC70 are proof that actionable data insights can help dealers sell stock profitably despite current market conditions. While past experience may say that estates have declined in popularity, the numbers show that there are willing buyers out there – and what’s more, they will pay more for the right vehicle.”

The platform also released the top 10 brands generating the highest retail margins, with 50% of the list featuring premium brands – with Porsche leading the charge.

The top 10 retail margin lists also reflect Dealer Auction’s disruptive buyer fee structure, where the savings associated with being a digital business are passed on to the buyers and in turn, the sellers get more money per unit. As Pearce comments: “This means the buyers have bigger retail margins to play with, and the sellers get more money for the metal.”

Underlining the strong retail margin potential in the market, the latest data from Auto Trader shows that the average price of a used car increased by a record 28.6% in November 2021. This not only marks the 20th consecutive month of growth, but such is the recent acceleration in prices, Auto Trader believes the market has recorded nearly five years’ worth of growth in just six months, with the average sticker price increasing circa £3,400 since May 2021 (£13,973).1

Marley concludes: “It goes without saying that dealers know their business better than anyone, but with so many different forces at play in the used car market, it’s more important than ever to be on top of all the changing prices, demand and consumer trends. At Dealer Auction, our data supports your instinct and experience, helping you concentrate your efforts on the right stock, so you never miss an opportunity. “It’s brilliant to see used cars had such a strong end to the year – we’re excited to see what 2022 holds!”

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About Dealer Auction

Dealer Auction is the UK’s smartest and busiest automotive digital wholesale marketplace. We give buyers and sellers more choice, better insight and greater retail margin. Dealer Auction is an independent company, created through a joint venture between Cox Automotive and Auto Trader. For more information, visit www.dealerauction.co.uk.

Launched in January 2022, Dealer Auction’s monthly Retail Margin Monitor tracks the highest retail margins seen on used vehicles with a significant number of units sold on the platform’s open network. The December 2021 edition analyses data from 1 to 31 December 2021.

Sources:

1 https://plc.autotrader.co.uk/press-centre/news-hub/retail-price-index-december-2021/