Auto Trader profit speeds ahead amid ‘robust’ second-hand car market

Auto Trader’s profit rose by a fifth this year, as second-hand cars continued to sell faster than before the pandemic.

The online marketplace said pre-tax profit rose 18% to £345 million for the year ending March 31, as it continued to squeeze out other market participants with two-thirds of UK car buyers relying on its platform.

Auto Trader said it had benefited from “continually strong levels of demand” across both the new and used car markets, as the supply of both increased over the year.

It comes after another online car seller, Cazoo, fell into administration earlier in May, after slashing hundreds of jobs as part of a heavy restructuring.

Auto Trader flagged that high interest rates continue to make it expensive for people looking to take out a loan to pay for a car, and that they were also increasing costs for retailers.

However, it said its platform remained 10 times larger than its nearest classified competitor, while UK retailer forecourt numbers were up 1%.

Auto Trader also flagged a risk from Google, which recently launched a vehicle advertising service.

It said: “There is a risk that this could gain traction as a consumer acquisition channel.

“We continuously improve our products to avoid erosion of our market share.”

Meanwhile, losses of £8.8 million from its car rental business, Autorama, are expected to reduce, despite the leasing market remaining tight.

Nathan Coe, chief executive of Auto Trader, said: “This has been another year of strong financial, operational and strategic progress for Auto Trader.

“More than eight in 10 car buyers now use Auto Trader during their car buying journey and two thirds of buyers only use Auto Trader.

“Our data and technology continue to underpin the UK automotive industry and we are constantly innovating to help our retailers access the very best tools to achieve their business goals.

“We are confident in our prospects for the year ahead and, in the longer term, we see significant opportunities to continue growing our marketplace and to move more of the car buying process online, on Auto Trader.”