Cap hpi survey reveals price erosion of stocking days

The gap between the advertised price of a used car and the achieved transaction price doubles over a 12 week period, according to research carried out by cap hpi.

Analysis of sales data shows that the average difference in the first week a vehicle is advertised is 3.8% rising to 6.4% by week 12.

The survey follows a report that dealer stocks are currently running at a five year high.

The results have prompted cap hpi to urge dealers to focus more closely on the cars they  source and how they price them to reduce stocking days.

“With concerns over a more volatile market it is important to make stocking decisions that keep your retail offer flexible. The research shows that sourcing the right vehicle, at the right price for the market, pays dividends,” said Philip Nothard, retail and consumer specialist at cap hpi.

“The data highlights the importance of understanding your brand, where you sit in the local market, what to sell and when.”

A survey of dealers by cap hpi showed that 48% claimed retained margins were worse in July than June, while only 19% said they had improved. It argues that making the correct stocking decisions for local conditions is key to maximising margins.

The study showed that different pricing and stocking strategies are required for different vehicle marques.

Nothard said: “The price sensitivity over time was not always related to volumes available in the market. Premium executive stock showed good price resilience, along with niche marques like Abarth. It is important to use the most up to date and accurate data when making stocking decisions.”