Used vehicle prices are being artificially inflated post-WLTP as competition hots up for ex-fleet and nearly-new stock, says Shoreham Vehicle Auctions (SVA).
The company predicts they are likely to stay this way until spring next year as the used car market continues to thrive and manufacturers continue to iron out their WLTP challenges.
Alex Wright, managing director at SVA, said: “Franchised dealers are quite simply short on stock and are seeing the used sector as a solution to improve their profitability following lower new car sales in 2018.
“Certain brands are finding it a challenge to source new vehicles post-WLTP and their franchised dealers are searching online and physical auctions country-wide for sufficient used stock for their forecourts.”
Wright said an increasing number of franchised dealers have been buying two- and three-year-old fleet cars in 2018 to keep their used forecourts stocked.
However, as WLTP has limited the amount of new cars fleets can acquire, they have been extending lease contracts on their existing vehicles, reducing the number of used cars hitting the market.
This has meant that as dealer groups are buying more and paying more for nearly-new and ex-fleet stock, independent dealers are finding it hard to compete with that buying power and are having to temporarily shift focus to lower specification and lower price cars, said Wright.
He added: What all this has served to do is artificially inflate prices within the used market. Prices at auction can increase very easily and it takes time for the books to readjust.
"Everyone in business likes a seasonal trend for comfort and WLTP has thrown that out for now.
"I have no doubt the market will settle but we’re of the opinion that won’t be until the next registration introduction in March next year.”