With used cars likely to be in short supply this year and prices rising as a result, dealers could well be looking at a return to the days of buy backs and self registrations to generate used car stock. The last time we were at this stage it nearly caused the whole business to go into meltdown, and who can forget the fields full of brand new cars sitting around unsold and unwanted as manufacturers went in to mass over-production.
If buy back deals are to be common place once again let’s hope we have all learned the lessons of the past. Let’s hope the manufacturer’s relentless quest for increasing their market share is not at the expense of dealer profitability, when residuals can be affected by too many similar models on the ground at the same time.
Whilst at the auction recently it was interesting to see how attitudes towards ex-motability cars seem to have changed quite dramatically. The Motability scheme enables disabled people to acquire a car by using their Government-funded mobility allowances. Unfortunately in the trade there has always been a stigma attached to these cars largely due to the shocking condition that many came back to the market in. The perception being that as they were not always driven by the person who qualified for the motability allowance but a relative or other carer, they were not always treated with the greatest of care.
In recent years, with less retailable used car stock around, dealers have had to look at this kind of prime 3 year old stock and try to overcome the long held prejudice against these kinds of cars and accept that, as the scheme worked harder to improve the process of taking the cars back in much better condition, more cars have been sold at better prices to the trade.
Interestingly, as far as the buying public are concerned, there is far more suspicion over ex-rental cars than ex-motability cars because of the fact that ex-rental cars will have had multiple drivers.
However rental companies themselves have worked incredibly hard to improve their remarketing and reconditioning and customers are far happier to buy an ex-daily rental car these days because everybody has much more confidence in the pedigree and condition of these kinds of cars.
In fact many car dealers, especially car supermarkets, hold a large percentage of ex-rental cars because they can they have been maintained to a high level. Add to this the fact that there is a very efficient claims procedure should any problems arise, the stocking of these cars is really a no-brainer.
It is interesting that car dealers in the main are exactly the same as the customers they serve in that they are happy to pay the money for the right quality of car and secure in the knowledge they will have the backup service should they buy a car that is a ‘nail’. Peace of mind and confidence in the supplier will lead to better profitability and increased volumes of cars bought and sold.
Simple really isn’t it? We all basically want the same thing.