Vertu welcomes growth in used car sales but warns of volatility ahead

Vertu Motors has cheered the recovery of used vehicle sales as prices continue to steady but cautioned that incoming zero emission rules could spark further upheaval in the market.

The car dealership, which has 189 sales and aftersales sites, reported 6.7% growth in like-for-like used car sales by volume in its first quarter to May 31.

It saw comparable sales of new car and motability vehicles rise 6.8% in the quarter.

Vertu has reported more stability of used car prices, having seen them tumble by 10.3% in the final quarter of 2023 following steep gains in the previous few years.

Demand has rebounded since the start of this year, with Vertu saying prices have settled into “more normalised seasonal trends”.

But the firm warned that stretching targets for car manufacturers to achieve specific zero emissions vehicle (ZEV) sales targets could cause volatility in the market and send prices for new and used motors higher once again.

It said: “The Zero Emission Mandate to force the uptake of zero emission vehicles sold in the UK has the potential to create volatility in the new car market.

“This may include reduced supply of new petrol and diesel cars in the coming periods and would lead to a strengthening of petrol and diesel used car values.”

Late last year, Prime Minister Rishi Sunak pushed back the ban on the sale of new petrol and diesel cars in the UK from 2030 to 2035.

But the Government has said that it will still impose targets for car manufacturers to achieve ZEV sales targets.

More than a fifth (22%) of new cars sold by manufacturers in the UK next year must be zero emission, rising to 80% in 2030.

In its latest update, the AIM-listed company said it remains on track for full-year guidance.

It follows results in May showing revenue at the dealership rising to £4.7 billion in the year to February 29 from £4 billion the previous year, helping pre-tax profits lift 6.5% to £34.6 million.