Sourcing for Success – Tackling today’s sourcing challenges
In our recent Sourcing for Success webinar, we explored the evolving landscape of automotive retail and the sourcing challenges retailers are facing in a fast-paced market. With rising supply and steady demand, now is the time for retailers to rethink and diversify their sourcing strategies to stay competitive and maximise opportunities.
Below is a summary of the session, but for the full discussion — packed with even more insight and practical sourcing tips — you can watch the webinar using the button below.
Market Health Overview
Used Car Sales (Year-On-Year)
Recent data shows supply on Auto Trader has grown by 5.7% year-on-year, outpacing demand, which is up by just 1%. This shift has caused a 4.5% drop in overall market health.
Despite that, stock is still turning quickly. The average speed of sale is now 25 days (down from 26 last year), with independent retailers averaging 29 days (down from 31) and franchises at 21 days (down from 23). Meanwhile, retail sales volume is up 5.2% year-on-year, underlining a resilient consumer appetite.
Key Sourcing Challenges
Used Car Supply Constraints
The supply of three to five-year-old used vehicles has been significantly impacted by production disruptions during the pandemic in 2020-2021, resulting in a 37% drop in this age cohort compared to 2019. This has intensified competition for limited stock, particularly among independent retailers and car supermarkets that rely on this segment.Stock Replacement and Rising Costs
With vehicles selling rapidly, retailers face the challenge of replenishing their forecourts effectively. An empty forecourt space costs retailers an average of £420 per month, so getting the right vehicles in quickly is critical.
Additionally, auction fees, financing, logistics, and preparation costs continue to rise, further squeezing margins.Intensified Competition at Auctions
Many retailers report struggling to acquire stock at auctions due to increased competition and rising prices. The constrained availability of three to five-year-old vehicles has led some retailers to either overpay or compromise on margins, impacting profitability.
Emerging Opportunities
Data-Driven Sourcing Strategies
Auto Trader tools such as Market Insight and Retail Check are helping retailers make smarter sourcing decisions. These tools provide real-time supply, demand, and pricing data, so you can identify and target the most in-demand stock more confidently.Diversification into Alternative Fuel Vehicles (AFVs) and EVs
As internal combustion engine vehicle supply shrinks, retailers should be looking to embrace electric and alternative fuel vehicles.
The used EV market has grown 45% year-on-year, with a median days to sell of 29 days—comparable to petrol and diesel vehicles. And with an 8% increase in used EV supply expected in 2025, early adopters will be best placed to benefit.Optimising Forecourt Strategy
To stay profitable, retailers need to balance stock mix, speed of sale, and pricing strategy. Retail Check can help you identify top-performing vehicles, forecast speed of sale, and set optimal pricing that reflects the live market.Leveraging Private Seller Listings and Existing Customer Data
To supplement stock, consider sourcing from private seller listings or your existing customer base. Tools like Retail Accelerator can help you analyse past transactions and find opportunities to reacquire vehicles your customers are ready to part with.
Looking Ahead: A Long-Term Perspective
The used car market is evolving, and the sourcing challenges of today won’t be solved by short-term tactics alone. The supply shortage of 3–5-year-old vehicles will continue for years, which means diversification is essential.
Stocking older vehicles can provide a short-term buffer, but long-term sustainability depends on embracing the shift toward EVs and AFVs.
Retailers who act early — integrating data-driven insights, optimising their forecourt strategies, and adapting to supply trends — will be best placed to succeed in the years ahead.
Helpful Sourcing Resources
Dealer Auction - Get exclusive access to more stock from more sources. Plus, view Auto Trader Valuations and Retail Metrics directly within the platform to help you source smarter.
Unlocking Stock in 2025 Webinar - A deep dive into the latest market trends and how you can diversify your stock to unlock opportunities in the current market.
Sourcing Masterclass - This on-demand masterclass provides expert insights and a breakdown of the tools you have available to you to build a smarter, more profitable sourcing strategy.
If you’re looking to develop an impactful and long-lasting sourcing strategy, we’re here to help.
Book a Forecourt Review with your Account Manager and they’ll work with you to understand your key sourcing challenges and share unique market insights like those above to help you identify key opportunities specific to your forecourt.
Alternatively, call us on 0345 111 0002 or email accountsupport@autotrader.co.uk.