Whilst kicking back at the auctions recently I found myself with a bunch of guys who were remarking on how difficult it was to source good quality used stock to fill their forecourts (quelle surprise). When they did manage it, they told me, it ended up costing them a fortune.
As they were quite a mixed bunch, one a prestige buyer for a small dealer group, one a volume buyer for a multi franchise plc and one from a supermarket, I asked them all what they do to find the stock when traditional routes are not turning up the required volume of cars needed. I also asked them how prepared they were to broaden their criteria for buying as a result?
There was, of course, a good reason I wanted to know this info, to follow on from our article on late plate, low mileage cars having non franchised dealer service stamps. I wanted to know whether they would firstly still be buying them and secondly how much would they de-value the car as a result? In addition if they wouldn’t buy them previously would they now consider them given the difficulty in sourcing stock?
The consensus seemed to be that they would rather pay top dollar for a car with the right pedigree than buy a car with non-main dealer servicing. The supermarket buyer, though being a volume player, did not think it was as much of an issue as the franchised buyers and felt if the car was on its toes other than the servicing issue he would be happy to buy it. The others said that they would not even consider buying the car as their customers would not expect to visit their dealerships and buy cars with non-franchised history but an exception may be, for example, a 3 year old Range Rover Sport with all the toys and it would need to be around £3-4k cheaper than its franchised equivalent.
We have covered this topic before and came to a similar conclusion however the fact that consumers are still taking their cars to service centres such as Kwik Fit and Halfords means that clearly there are many models not financially affected by this devaluation. Either that or they are more interested in making short term savings than worrying about what may happen when the time comes to sell the car.
Interestingly, according to our trio, they are frustrated that there seems to be an inability to get the message across that franchised dealers are very competitive and that customers would not make massive savings as a result. However they were not prepared to consider going back to the dealer who sold them the car for fear of being charged fortunes. This, they believe, is an unfortunate legacy of the past where drivers really did get ripped off at franchised dealer service centres who wrongly believed that drivers would always come back to them no matter how poorly they were treated or how much they were overcharged.
That arrogance prompted many manufacturers to introduce service plans with their new cars, often free of charge, in order to tie the customer into the brand and the dealer and stop them defecting. This, of course, would suit everybody and not least our small band of buyers who are seeing the selection of cars they can buy diminishing as a result.
For the record the brands represented were BMW, Audi, Mercedes, Ford, Seat and multi franchised cars. For the customer they need to think long and hard about what they perceive as “saving money”.
For volume cars such as Ford, Vauxhall, Peugeot VW etc it might not have such a drastic effect but for prestige brands the difference in value could be enormous.
It is well worth making the comparison between the service centres and franchised dealers well before deciding what the best financial option might be.
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