Auto Talk at CitNOW Group
Auto Talk at CitNOW Group

Effective stock management and strategic pricing

Even though Used Car prices have fallen since the start of the year, retailers are still enjoying strong GPPU performance, with average GPPU for April 2024 tracking on average at £1448, which is the virtually the same as the 2023 average GPPU of £1449.   

These GPPU results have been achieved regardless of the decline in used vehicle prices seen across all age ranges.  

Notably some age ranges have seen lower levels of decline in the retail sale price than others with 0-3 age vehicles falling just 1% comparing April 2024 to all of 2023 averages, and a similar 2% decline has been seen for the 4-6 and 7-9 age brackets.  

The biggest loss however has come from the 10+ age bracket, with the average vehicle retail sale price fell from £10,945 down to £8,567, a decline of 22%. 

Retailers that closely manage their stock will of course be the winners in the longer term as they can see the stock that is generating the best margin, from our data we can see that GPPU for 0-3 vehicles has fallen 7% YTD to £1528, but 4-6 vehicles have increased by 6% up to £1292, and 7-9 vehicles have increase their GPPU even more by an average of 11% to £1496. 

Looking at the decline in GPPU for 0-3 age vehicles we can see that on average these vehicles are priced at £26,253 and are taking 62.8 days to sell. These longer sale times, and higher prices may be impacting the customers purchase decision, causing retailers to lower the price to make the sale, impacting the GPPU. 

When you look at the 4-6 age vehicles these are on average 49% cheaper that their 0-3 counter parts and are being sold nearly twice as fast, with average days to sell sitting at 36.9 days. Its easy to understand why any consumer with a set budget will opt for these slightly older vehicles over and above the 0-3 age range.  

One thing to consider however with the sale of older vehicles is the longer-term retention of these customers from an aftersales perspective, as once the used car warranty has expired customers will be open to shop around for the better price for their service. This is something retailers need to consider during the sales process and have in place tools to lock these customers in long term through service plans, or extended warranties. 

John Law, Executive Director, CitNOW Insights commented “These numbers highlight the importance of clear pricing strategies, in a declining market trying to keep the retail sale cost high will only impact the days to sell, it’s a balancing act for retailers but having the right tools in place can make this easier.”

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