Buyer searches for used cars hits new high for February but supply shortages and economic pressure damped lead volumes

February’s used car market was shaped by the ongoing shortage of dealer stock and continued price stability, although higher than usual levels of online buyer activity was dampened by a softening of conversion to lead rates, according to eBay Motors Group’s latest. Market View by eBay Motors Group.

Average stock volumes dropped for the second month in a row from 55 to 51 cars, their lowest level since October 2022.

Car supermarket inventories were hit the hardest with volumes down 16% to 336 units, a month-on-month shortfall of 62 units, followed by franchised dealers dropping 11% from 85 to 76 units. While independent sites remained unchanged at 33 units.

However, the shortage of stock meant prices, tracking at historically high levels, remained stable, dipping just 0.6% month-on-month from £19,262 to £19,152; still 4% higher than last February.

Depleted stock levels also prompted a small improvement in days to sell with cars averaging 40 days on forecourts, compared to 42 in January.

Consumer activity remained strong with hitting a four year high in browsing sessions across both February and January.

However, eBay Motors Group expressed concern over consumer uncertainty with the high level of online visits not immediately flowing into leads.

“Matching supply to consumer demand remains a challenge for dealers, although the continued strength of pricing is helping many to conserve their margins,” said Lucy Tugby, Marketing Director of eBay Motors Group.

“Following a positive start to the year, online views remained encouragingly high throughout February, evidence of a strong appetite to purchase. However, the lack of supply is being compounded by the economic pressures facing consumers, resulting in a softening of conversion to lead rates.

“Buyers are in the market but with increased pressure on their household budgets they are understandably driven by price and affordability, we can see this in the high volumes of searches for older cars in the 6-14 year old bracket. Many will also be hedging their bets to see if prices come down.

“As we head into spring, dealers may have to work their marketing harder to reach consumers earlier and maintain the conversation for when they are ready to buy,” said Tugby.

The February Market View also shows a small but notable year-on-year rise in the number of electric vehicles being stocked by dealers.

Although petrol remains the most popular fuel choice, accounting for 49% of all listings, followed by diesel (40%), their share continues to be slowly eroded by electric and hybrid alternatives.

In February EVs accounted for 5% of all dealer listings, up from just 1% in February 2022. While hybrids more than doubled their year-on-year share from 3% to 7%.

Meanwhile, the industry realignment of advertised prices in the used EV sector continued with some notable month-on-month drops for some Hyundai Ioniq, Jaguar I-Pace, Nissan Leaf and Renault Zoe models.

“The volatility in used EV pricing continues, leaving many dealers with little choice but to wait and see how it plays out. Likewise, buyers aware of the price drops, will also be biding their time,” said Tugby.