Car buyers are now being very specific in their choice of used car, in a way usually reserved for ordering a new car to an exact spec.
Dealers are saying that it’s not just colour it is now mileage parameters, exact spec and age.
However once their precise requirements have been attained people are quite prepared to pay for the right car.
The point is that with the decline in new car sales and the adverse affect on residual values, buying ex-demos or nearly new models is more attractive financially for someone when compared with the cost of a new equivalent.
Many dealers put that down, in part, to the ongoing problem with excessively long lead times. Almost all car makers are now offering high specification such as alloys, a/c, iPods etc to their most basic of cars and as they go up the range the spec can be incredible.
We recently told the story of a buyer who bought an X5 and had a staggering £15k worth of extras on a car that already comes highly specified. No surprise that there was a 6 month wait for it. But when this transfers to the second hand market there are some examples out there with great spec and large savings to be had against new.
Ironically in the trade these cars have been fairly bullet proof in terms of the money they achieve because of their uniqueness and their rarity. This is enough to fetch a premium price which can be transferred to the buyer and be very profitable for the dealer.
To some extent these cars are propping up the performance of the rest of the potential sales dealers make on cars where nothing else matters but price, and spec and low mileage make way for low cost and economy.
There is a feeling now that low mileage cars are not the accepted 3 years and 36k. Dealers are telling us that customers want the absolute lowest mileage they can and that, in some cases they are turning their noses up at a 3 year old car that’s covered just 30k, which is slightly less than average. This concentrates the dealer’s inventory in a very narrow range and mileage profile, and in some cases closes off potential interest from customers who are more flexible about mileage but are keen to negotiate a good price.
It does tend to be the case however that when the market hardens, and the balance of power switches back to the buyer, that dealers tend to try and be all things to all men. They try to second guess what all buyers are after rather than just sticking to the basics of having quality cars of a broad range to appeal to as wide a section of potential buyers as possible in the market place they are operating in.
They really should just trust that by getting the basics right the market and the buyers will eventually return to the best dealers.