Dealer optimism about the used car sector has reached a 14-month high, according to the new Startline Used Car Tracker.

June’s research shows that 64% say they feel positive about the market, a sharp rise from 27% in May and 20% in April. The figure is the highest since the motor finance company’s research was launched in April 2022.

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Reasons stated by dealers include a general improvement in the market (mentioned by 49%), improved stock supply (36%), rising consumer confidence (18%), better motor finance availability (16%) and enhanced economic conditions (11%). Just 16% think the market is weakening.

Paul Burgess, CEO at Startline Motor Finance, said: “In our view, this upbeat view of the used car sector is very much about dealers finding that 2023 hasn’t turned out as badly as many feared at the start of the year and that the market situation is relatively stable.

“There are some very obvious problems – the still-rapidly rising cost of living is casting a shadow over the economy and taking many potential buyers out of the car market, stock availability is perhaps a little better but still tough and the forthcoming arrival of a large number of EVs into the used space creates a high degree of uncertainty.

“However, despite all of those issues, most dealers are still doing pretty well and that central, essential fact is creating a generally positive mood, helped by factors such as perceived improvements in stock availability and consumer confidence.”

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June’s Startline Used Car Tracker also asked dealers whether they expected stock supply to improve in the next 12 months, with 55% agreeing this was likely. Improved new car production is seen as the biggest driver of this trend, mentioned by 43%.

However, 25% think that stock availability won’t improve for several years, 18% that the average vehicle they are selling will be older and 9% that it will be in worse condition.

Paul said: “While it seems unlikely that any dealers are expecting a flood of stock to suddenly hit the market, there is a reasonable degree of confidence among the majority that we are going to see a gradual easing of the situation, especially as new car sales continue to ramp up, bringing more vehicles into the remarketing space.

“It is interesting though, that one in four dealers don’t foresee any improvement in the situation in the medium term, while almost one in five expect their stock to continue to age. These dealers clearly believe that the current issues are entrenched in the market.”

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