CONFIDENCE has returned to the independent used car retail sector as sales again grow, according to the car cost information experts CAP Automotive.

Key to the improvement in sentiment for independent used car dealers is an improved balance of supply and demand, according to the latest review of dealer sentiment.

Each month CAP questions a ‘Dealer Insight Panel’ of around 100 independent used car retailers. It is part of the research for Black Book Live, CAP Automotive’s unique real time used car trade values trending tool, used by businesses across the industry.

In the latest survey more than half reported that sales were increasing but the most significant change in the market this year is in the proportion of independent dealers reporting difficulty in sourcing the right cars for retail.

The year began with frustration for dealers over a shortage of high quality stock that was forcing them to compete harder and therefore pay more for the best cars. But the latest figures now show the smallest proportion of dealers  finding it difficult to source the right cars for their forecourts than since August last year.

Dealer assessments of the current business climate have also returned to the heady days of last August when dealers gave their highest vote of confidence in market conditions since CAP began measuring their sentiment.

Every measure of dealer performance is currently showing positive in CAP’s research, with stronger month-on-month retail sales and a 16% improvement on the end of last year.

Mike Hind of CAP Automotive said: “Although used car retail sales have been good for independent dealers this year, profitability was proving a real challenge because of the increase in wholesale values caused by strong competition for the best quality stock.

“Now they appear to have come to terms with the higher prices and are once again enjoying the fact that retail demand is keeping the metal moving.

“When we look more deeply into the figures, however, they do reveal that many more dealers have been completely holding off on stock purchase than at this point last year. This is no doubt due to expectations that the March plate change would bring in a fresh influx of high quality part-exchange vehicles which would ease the supply side and possibly lead to lower trade values.”

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