Overage stock is on the decline, with 83% of dealer reporting a fall in overage used cars as a result of supply and taxation deals.
Data from Cox Automotive shows stock has started to return to the wholesale sector, with 43% citing a decline in consumer demand.
Days in stock have also increased by 40%.
UK dealers also experiences strong enquiry levels, although conversions are taking slightly longer despite the plethora of available deals and discounts.
Phillip Nothard, Customer Insight and Strategy Director at Cox, said: “Retailers and manufacturers are preparing for the introduction of RDE on 1 September.
“As a result, we have seen increased levels of tactical registrations by various manufacturers. Retailers are also taking advantage of potential incentives offered by the manufacturers.
“From a used car perspective, increased levels of pre-registration product entering the sector will create additional much-needed volumes in the wholesale market.
“We also anticipate increased fleet disposals, as fleet operators replenish stock fleets.
“Although we could experience unseasonal registration throughout August and September, considering the current headwinds facing the sector, performance and activity remain reasonably healthy.”
In the wholesale sector, the market improved but saw a drop-off in consumer demand.
Both average wholesale prices and volumes experienced an increase of 5% MoM, while average mileage eased-up slightly to 61,463.
Dealer part-exchanges also remained stable in July, with an increase of 8% in volume MoM and prices level.
In terms of stock mix, NextGear Capital recorded a small decline in average holding days (down to 61.8 days) and average mileage marginally down to 59,406 for vehicles bought using its stock funding plan.
It also saw the average age of its funded units up from six to seven years.
AFVs experienced a 27.3% YoY increase, while petrol improved by 13.7% and diesel fell by -16.2%.
Nothard added: “While the wholesale market remains challenging and a tad inconsistent, it is positive to see stock availability improving.
“We are also seeing some dealers moving to Grade 3 product. The significant hike in AFVs prices demonstrates that there is a growing demand from consumers and a real appetite to evolve their stock profiles among dealers.”