With continuing anxiety about the sourcing and pricing of used cars, many dealers have started to realise that the buying fever which has carried us through the last six months is really now sliding to a halt. Some cars are now fetching so much at auction and other trade outlets that selling for a profit will only happen if customers still believe the headlines, i.e. there are great savings to be had on used cars. The reality is there isn’t, and there are more examples of new cars across the board being much better value than used, especially if bought via a PCP. Some dealers however are still competing to buy stock whether it’s right for them or not just to have well stocked forecourts and they are doing this even if it means selling cars for little or no profit.
One dealer told us that where as his traditional sales ratio is 2-1 in favour of used it is now virtually 1-1, so it’s not always wise to listen to the headlines, new car sales are definitely making a comeback and then some.
Even in the independent sector, where the scramble for decent saleable stock is as frenetic as ever, there are traders scratching their heads as the hammer goes down on yet another car which is £000s into book and we all wonder what the hell the car will be marked up for! The old saying You can fool some of the people all of the time, and all of the people some of the time, but you can’t fool all of the people all of the time’ will be tested to the limit in the coming months and wholesalers who are just naming their price at present may find that the gravy train is about to hit the buffers in a spectacular way as buyers do their homework and realise that a late plate used car is no longer anywhere near the best option.
Dealers are increasingly looking to stock three year and older cars in the knowledge that although it is still very expensive at least customers cannot compare against a newer derivative and the car is more unique at this age and condition. In this scenario mileage and spec are more important to the retail price being asked, the downside being that with more dealers chasing this kind of stock the more the price is likely to keep rising.
Where will all this end? Who knows it seems every time a plateau seems near up go the prices again. It’s also clear now though that the reasons seem to be more about lack of quality stock and less about demand.