Unsold used car stock up 16%

  01 October 2017 - 3:31pm |    devsupport

Car retailers are faced with rising levels of unsold used car stock, up 16% in a year, according to research from accountants UHY Hacker Young.

Stock is worth more than £27 billion, up from £23.6bn, and almost 18% of the industry’s turnover, the report claimed. It said manufacturers were pushing vehicles onto retailers, who were struggling to find space, with some having to invest in additional offsite holding facilities. This could result in tying up capital and preventing investment elsewhere.

Problems were compounded, said UHY, by challenging sales targets.

Paul Daly, UHY partner said: “Car makers continue to push more and more vehicles on to dealers’ books, but that can’t go on indefinitely. It’s unsustainable for unsold stock to keep rising so quickly.”

UHY added a further danger came from retailers becoming over-reliant on the temporary cash flow boost given to them when they take new cars on to their own balance sheets. A number of manufacturers provide dealerships with an invoice to claim back VAT at 20% on these purchases immediately, even though manufacturers are not paid until the car is sold.

Mr Daly said: “Dealers are risking a cashflow crunch if they don’t plan adequately for the cyclical nature of getting cash boosts through reclaiming VAT on unsold cars. It’s a short-term relief that can cause huge problems when levels of unsold stock begin to fall again.”

imageTags: stock, used cars

Start your free 14 day trial

Get free access to our Bulletin, Agenda & Profit for 14 days.

After 14 days we will auto bill your credit or debit card unless the order is cancelled.


As an auto retail executive you need insightful and unique industry intelligence to boost your business potential. Here’s a taste of what Auto Retail Network has to offer:

  • Get informed and boost your business potential
  • More than 1,200 fellow executives have joined us
    since launch
  • Independent, carefully crafted, unique content relevant to you and your business
  • Develop a greater awareness of market trends and opportunities
  • Access to a wide range of materials whenever, wherever and however you want it
  • Significant discounts on ARN events, reports and
    other publications