With the end of January in sight many dealers are breathing a collective sigh of relief at the fact that there are indeed customers about with money to spend on cars.
However it is clear that buyers are taking their time to choose a car and are being selective about where they are buying from.
The price war is also hotting up with many dealers believing that by being ultra competitive on price the phones will start ringing and customers will fill up the showroom even if margins are being eroded as a result. Their strategy boils down to the fact that there are then other opportunities with f&i products on which to make a profit and that’s enough for them to distress the cars as a result.
The problem with this policy is that if supply continues to be a problem those dealers may regret taking these drastic pricing actions so early in the year when the same stock might cost much more down the line.
Meaning the consumer will be squeezed again by having to pay more for less.
Car buyers looking for used cars this year should aim to make a real comparison because, as we know, a headline price which is the cheapest does not necessarily mean the best value for money on the overall package.
For example if a car is offered at £500 cheaper than its nearest comparative example but it’s just “there you go, there’s the keys anything else you want is extra” then that’s fine as long as buyers understand that this is what their money is buying them.
Here are some examples of what is being offered in many independent and franchised dealers as part of the purchase, and it is important to weigh up these factors when looking at prices.
1. Has the car been serviced in accordance with the manufacturer’s schedule?
2. Will the car have a multi point inspection carried out before the customer takes delivery, and what does this cover?
3. Does the car have a minimum of 9 months MOT?
4. Is road tax included?
5. How long is the warranty? 3 months minimum or 1 year – where cars fall out of the manufacturer’s warranty.
6. What does the warranty cover and what is the claim limit?
7. Does the car come with breakdown recovery assistance and if so for how long?
8. Will the car be fully valeted and how much fuel will be in the car at the point of collection?
9. Is there an exchange policy in place and if so how long and what are the qualifying parameters?
10. What are the tyre tolerances? For instance the tyres might be legal but how much tread is left on them? If you are going to have to replace them in a couple of thousand miles tyres are expensive so it simply may not be cost effective.
Some of these things may be quite obvious but if one dealer offers the majority of these things free of charge with the car, and another doesn’t there could end up being a major price disparity between the two making the cheaper car actually more expensive.
Moral of the story? Always check with your dealer and be happy that what you are getting is cost effective and satisfactory.