New data has been published revealing the most profitable stock for motor traders. The information should prove highly valuable to dealers by steering them towards the vehicles they should be trying to get their hands on! So what makes and models came out on top?
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The statistics have been produced by Dealer Auction. Their Retail Margin Monitor aims to help motor traders to identify the best money-making stock to hold. It combines data on which vehicles are the quickest to sell and those generating the highest margin. These insights can prove hugely valuable to traders when deciding where to invest their cash.
Dealer Auction describes itself as, “An ambitious and disruptive technology start-up.” It launched in 2019 as a joint venture between Cox Automotive and Auto Trader. The digital marketplace aims to, “Meet the needs of dealers, manufacturers and fleets for the benefit of all.” It brought together elements of: dealer-auction.com, Cox Automotive’s Manheim Online and Auto Trader’s Smart Buy . The “thousands of sellers and buyers” that transacted used vehicles each day on those platforms now receive “more choice, better insight and greater margin.”
Two new metrics will be included in the Retail Margin Monitor from now on to provide greater context to the results. From May 2023 onwards ‘Average Auto Trader days to sell’ and ‘Average Auto Trader Retail Rating’ date will appear in conjunction with its top 10 profit-generating models. These elements highlight how models featuring further down the top 10 profit chart could actually prove the better stock in certain circumstances for dealers.
The ‘Average Auto Trader days to sell’ metric displays exactly what it says on the tin. However the ‘Average Auto Trader Retail Rating’ combined three key data points to provide a picture of consumer demand for each vehicle. A higher score designates it as being more desirable.
Kieran TeeBoon, Dealer Auction’s marketplace director, said: ““It’s clear that dealers are paying close attention to data and insights to support their instincts when sourcing quality stock. Our evolution of the Retail Margin Monitor reflects this – drawing on the real-time data capabilities of Auto Trader to highlight models that can offer not just solid profit, but a quicker turnaround too.”
Richard Walker, Auto Trader’s data and insights director, said “A car that isn’t selling is not only eating into its own potential margin, but it’s also preventing the sale of stock that could be sat in its place.” He added: “These new metrics offer a powerful new layer of intelligence, which will help retailers to maximise overall profit potential by not only identifying stock with the best individual return, but also those most likely to fly off forecourts.”
TeeBoon believes, “It’s essential for dealers to have a healthy stock mix of ‘quick wins’ and opportunities for higher profit.” For example, “The performance of the Mazda CX-5 and also the Nissan X-Trail shows that dealers shouldn’t shy away from mainstream brands when seeking extra profit. “In theory, you could sell two Mazda CX-5 models with a combined profit of £5,210 in a similar amount of time to selling one BMW 5 Series with a £2,750 profit.” Though that scenario would require an extra space on the forecourt plus double the sales and processing resource. All of which eats into margin.
So What Are The Most Profitable Vehicles for Car Dealers?
At an average of 23 days, Mazda’s CX-5 was the fastest selling model in Dealer Auction’s top 10. Yet its average retail margin £2,605 only placed it at number nine. But overall it has the highest Average Auto Trader Retail Rating at 94.
The Land Rover Discovery Sport is a consistently high performer. It achieves an average retail margin of £4,150 with an Average Auto Trader days to sell of 30. That generates an Average Auto Trader Retail Rating of 89. Land Rover also finished as the best placed brand with an average retail margin of £3,510. BMW came in second with £2,720 and Mercedes-Benz third at £2,670.
The cost of living crisis is showing no signs of easing and the full impact of a much higher Bank of England base interest rate is yet to be felt on consumer spending. Additionally the consequences of sky high inflation will be impacting many car traders bottom lines. So the opportunity to analyse clear concise data that can help optimise profitability could prove a very welcome innovation for many car dealers.
Top 10 models by retail margin (May 2023)
| Make & mode | Average retail margin | Average Auto Trader days to sell | Average Auto Trader Retail Rating |
|---|---|---|---|
| Land Rover Discovery Sport | £4,150 | 30 | 89 |
| Land Rover Range Rover Evoque | £3,620 | 32 | 76 |
| Volvo XC90 | £3,475 | 37 | 68 |
| Mercedes-Benz E-Class | £2,820 | 43 | 54 |
| Volvo XC60 | £2,810 | 34 | 72 |
| BMW 5 Series | £2,750 | 44 | 51 |
| Jaguar XF | £2,700 | 39 | 64 |
| Mercedes-Benz A-Class | £2,650 | 41 | 62 |
| Mazda CX-5 | £2,605 | 23 | 94 |
| Nissan X-Trail | £2,600 | 29 | 90 |
Top 10 brands by retail margin (May 2023)
| Make | Average retail margin |
|---|---|
| Land Rover | £3,510 |
| BMW | £2,720 |
| Mercedes-Benz | £2,670 |
| Volvo | £2,510 |
| Audi | £2,450 |
| MINI | £2,330 |
| Mazda | £2,230 |
| Kia | £2,220 |
| Volkswagen | £2,070 |
| Nissan | £2,050 |
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