Although it’s not quite carrmageddon at present there are certainly some serious concerns in the used car market with many dealers holding ageing stock which they cannot achieve a satisfactory margin on.
These things are not new and there are always periods of slack trading and lacklustre sales but the fusion of the euro crisis with the time of year, too many late plate models being offered for sale and the rental companies heavily de-fleeting is leading to a severe lack of confidence which will only return once the market steadies.
Ironically at this time of the year many dealer groups will be de-stocking anyway to achieve end of year stocking targets. The problem is when they have to replace the stock in January similar models are far more expensive as demand increases.
The canny dealer will take advantage of falling prices by taking his medicine on his existing older stock now and replacing it with models at today’s money which he can then sell and take a greater margin from in the new year.
From a customer’s angle it is interesting that buying a car at this time of year is not top of their priority list yet the irony is there is probably never a better time to take advantage of the circumstances to negotiate a fantastic deal on a new or used car.
Some of the offers are unbelievable; for example low rate or 0% finance, 3 years free servicing, deposit contributions, free insurance and so on, but because traditionally we all love a sale the New Year promotions generally have more impact in attracting buyers.
The perception being that a better deal and a wider choice can be had even though in reality, with dealers up and down the country de-stocking and ‘taking their medicine’ when it comes to reducing their inventories, buyers would be better served looking now.
In much the same way that Christmas now seems to start at Halloween perhaps the sales should start in November!