Indicata UK has revealed that UK dealers are projected to lose almost £500m in 2024 due to mispricing used cars stock.
The study, which examined more than 50,000 used cars sold or on sale by 300 UK dealer groups, identified two primary mistakes—overpricing slow-selling stock and underpricing fast-moving, popular vehicles.
Go deeper with GlobalData
The analysis, powered by Indicata’s used car pricing platform, assessed vehicles based on the sale price, speed of sale, and Market Days’ Supply (MDS)—a metric that calculates inventory supply against average daily sales.
Indicata’s findings suggest that the largest loss, over £400m, is due to dealers selling their most sought-after used cars too quickly at market price, rather than at a premium.
Additionally, dealers are losing approximately £15m by keeping older cars in stock for more than 60 days without reducing prices to hasten sales.
Indicata recommends a dynamic pricing strategy for dealer stock, leveraging real-time data to maximise profits and stock turnover.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe company advised dealers to price their best stock above market rates to enhance profitability and avoid rapid sales.
If a car remains unsold after one month, prices should be adjusted to align with the market.
For average stock, Indicata suggests a smaller profit margin initially, with regular price reviews to prevent losses.
For slow-moving inventory, the data indicates that trading the majority of these cars is more beneficial than retailing them.
Indicata UK head of sales Dean Merritt said: “The level of used profit being left on the table by dealers is worrying, especially when there is a restricted supply of used vehicles in the market. With used cars making such an important contribution to overall profitability dealers must commit to a dynamic pricing strategy supported by real-time data.
“The worst scenario is when the dealer purchases in-demand stock and then sells it too quickly by pricing it too cheaply. Stock turn is, obviously, a big consideration for all used car dealers but in this case, being patient and pricing a good car above market price in the first few weeks is the secret to making additional profits.”
This advice follows the Indicata Market Watch report last month that noted shifts in the used vehicle market, with petrol cars gaining market share and battery electric vehicles seeing a decline.
