Motor Industry News
As the clocks go back and winter sets in, values in the used car market are feeling the pinch. The thoughts of Christmas are now entering buyers’ minds. With it comes an apprehension to spend money on a car.
It was only a matter of time until trade activity started to slow after the recent months of stable values and the general buoyant feel to the market. But don’t be fooled, even though we are seeing a slight seasonal dip in values, the reality of the situation is that buyers are still out there and there aren’t enough good cars to meet demand.
In an ever transparent market where buyers use the internet to research a wide range of selling prices in a short period of time, traders and retailers are forced to keep a close eye on retail prices before making any hasty buying decisions.
Traders who have historically used the auction as a vehicle source are now really struggling to buy a Ready to Retail car and sell it for a good profit margin. So as we have previously mentioned, their attentions are turned to the cars that need some light preparation such as bumper scuffs and wheel refurbishments. Even these cars must be chosen wisely to avoid getting stung! The ideal way to buy stock at the moment is via part exchange. This gives the perfect opportunity to buy a car directly from the customer at the right price. Keeping the right stock at the price and maximising every single opportunity is the key.
Historically at this time of year the 4x4 market starts to pick up dramatically. 12 months ago dealers were buying all-wheel drive stock in ready for the onslaught of winter weather. Prior to last year the 4x4 market had benefited massively from the prolonged snow. However last winter was a different story. The snow never really came in the quantity that was hoped for by these forward-thinking dealers and as such many of them were stuck with over-age 4x4s in February. Will the trade take a chance and stock up again? So far it’s not looking that way and the seasonal valuation drops appear to be hitting these cars as well.
For November values have been dropped by 2% on average. There are some exceptions. Previous star performers such as Q5, which has now received a facelift and a reduction in lead time, have been dropped by up to 4%.