MANUFACTURERS’ reductions in rental volumes kept used supply under control during August.

Because of the decision to ease up on rental vehicles, which has been in effect since the beginning of the year, there are fewer nine-month-old cars to recycle than normal.

That reduction in supply has accentuated demand, which has improved considerably over last month, according to Glass’s Market Intelligence Service.

In the early summer, dealers were not optimistic about retail sales prospects and reduced their buying to match the forecasts. This meant that when retail demand improved there was an immediate need to source stock.

Throughout August and September, dealers made more frequent forays into the market. Initially fearful that customer enthusiasm might be temporary, just enough cars were bought to meet immediate needs. But customer demand was more sustained than predicted, which acted as a catalyst for lively wholesale trading.

As well as manufacturers’ rental supply reductions, new car sales were down 6% so far this year, meaning fewer part exchanges have been offered. New retail sales are down 10%, depriving dealers of both part exchanges and prime stock.

Auctions have felt the effect of the sales downturn. Total part exchanges came to a low ebb at the end of August and trade supply dropped accordingly. That was the turning point – by the end of the first week in September dealers were putting more cars through auction with unwanted part exchanges and the following week saw the arrival of ex-fleet cars. The indication was that these cars were absorbed into the wider market without difficulty.