With the recent resurgence of new car sales fuelled by the success of the scrappage scheme, it is becoming increasingly difficult for sales staff to justify the increases in used car prices to customers expecting a great deal fuelled by negative headlines regarding the state of the motor trade. The sources of these headlines are often inaccurate and worse considerably out of date, but due to the fact that negativity sells more copy than any positive spin, customers can be forgiven for believing that the industry is still desperate for sales and therefore quite willing to cut a crazy deal. The scrappage scheme, with its headline grabbing £2,000 incentive, has not helped the sales of used cars. When buyers have spoken to friends and relatives who have told them they bought a used car 2-3 months ago for a fantastic price, they are clearly unaware of the sheer speed in which used car prices have rebounded since then. When salespeople try to justify these price hikes (when they’re not even sure quite how they have come about themselves) these buyers rightly become suspicious.
The outlook for the remainder of the year is that stock levels will continue to be scarce and therefore with car dealers from across the spectrum trying to remain profitable it will be vital that customers get the message about this rapidly changing market. Sales people need to build value in themselves, their product, the experience they can provide and of course the ongoing service which prospective buyers can then justify to themselves paying the current market rates rather than just trying to buy on price.
One thing for certain is that during several commentaries over the last few months, and despite predictions that the used car market had reached a plateau, it continues to grow and prices show no signs of reducing in the short term. So if a purchase is being considered shopping around on price may become secondary to shopping around on service, and receiving a great deal may have more to do with ensuring that the right car comes with the right financial solution rather that the now vain hope of getting the “bargain of the century”.