State of the used car market
Discussion
To those in the trade, would you say things are normal for this time of year or are you seeing signs of worst things to come?
Talking to a dealer the other day, he said that more cars than usual are not hitting their reserve prices at auction, and especially in the premium sector, the same cars can be seen going through again on different days.
The quality of available cars also seems to be worse for some reason.
With auctions being the barometer, what should we expect in the spring?
Talking to a dealer the other day, he said that more cars than usual are not hitting their reserve prices at auction, and especially in the premium sector, the same cars can be seen going through again on different days.
The quality of available cars also seems to be worse for some reason.
With auctions being the barometer, what should we expect in the spring?
ked!This is my first winter in the motor trade and I've been told that things are normal for this time of year and to expect things to go a bit mental between christmas and new year as long as we dont have snow.
The slight down turn in the amount of quality used cars on market is due to the amount of fleet cars that are being kept for longer periods. That means that when they go to auction they are older and have a fair bit more mileage and that means more wear and tear.
The slight down turn in the amount of quality used cars on market is due to the amount of fleet cars that are being kept for longer periods. That means that when they go to auction they are older and have a fair bit more mileage and that means more wear and tear.
I'd suggest that this is always a crap time of year for sales.
I'd also suggest that year on year the car market is getting worse.
The 3 factors that hit the middle / lower end of the trade:
Internet - easier for private buyers to buy / sell / research cars.
Main dealer schemes for Insurance / finance - meaning people bought new rather than used cars.
Scrappage scheme - a hell of a lot of decent cars were taken off the road rather than the dross.
Many in the trade around the £3-10k price range go out and buy from private sellers as its the only way to get decent cars.
I'd also suggest that year on year the car market is getting worse.
The 3 factors that hit the middle / lower end of the trade:
Internet - easier for private buyers to buy / sell / research cars.
Main dealer schemes for Insurance / finance - meaning people bought new rather than used cars.
Scrappage scheme - a hell of a lot of decent cars were taken off the road rather than the dross.
Many in the trade around the £3-10k price range go out and buy from private sellers as its the only way to get decent cars.
Auctions are usually slow this time of year and many vendors are actually hold stock back to issue in January.
If anything I'd say the slow down is a lot less marked than normal with many cars still selling and getting good prices at auction. There are normally price drops in November and December but this year prices have held quite steady.
If anything I'd say the slow down is a lot less marked than normal with many cars still selling and getting good prices at auction. There are normally price drops in November and December but this year prices have held quite steady.
I've got a mint 02 Passat Tdi Sport I need to sell, straight as you like with uncommon extras such as heated leather, sunroof, cruise, 6sp. Bought the car a few weeks ago as in between jobs from its first and only fastidious owner. Has got every reciept from brand new. I'm looking for £2900.
Do you think I'll have much luck this side of Xmas?
Do you think I'll have much luck this side of Xmas?
b19rak said:
I've got a mint 02 Passat Tdi Sport I need to sell, straight as you like with uncommon extras such as heated leather, sunroof, cruise, 6sp. Bought the car a few weeks ago as in between jobs from its first and only fastidious owner. Has got every reciept from brand new. I'm looking for £2900.
Do you think I'll have much luck this side of Xmas?
Posting this free ad on pistonheads would have done you any harm.;)Do you think I'll have much luck this side of Xmas?
b19rak said:
I've got a mint 02 Passat Tdi Sport I need to sell, straight as you like with uncommon extras such as heated leather, sunroof, cruise, 6sp. Bought the car a few weeks ago as in between jobs from its first and only fastidious owner. Has got every reciept from brand new. I'm looking for £2900.
Do you think I'll have much luck this side of Xmas?
It depends if its done 30,000 or 180,000.Do you think I'll have much luck this side of Xmas?
First December in full time trading.
The only three customer groups i am seeing at the moment are
(a) people who have to change their car - their old car has given up.
(b) first time buyers
(c) people who need a different type of car. Common change there is hatchback to people carrier. Saloon car to estate car.
Not getting anyone just changing because they fancy a change.
Cars below £1000 move very quickly.
Margins are particularly slim, but i still managed to get 19 away in November. 3 so far this month - so thats one a day as i'm closed today.
The only three customer groups i am seeing at the moment are
(a) people who have to change their car - their old car has given up.
(b) first time buyers
(c) people who need a different type of car. Common change there is hatchback to people carrier. Saloon car to estate car.
Not getting anyone just changing because they fancy a change.
Cars below £1000 move very quickly.
Margins are particularly slim, but i still managed to get 19 away in November. 3 so far this month - so thats one a day as i'm closed today.
Having been in the trade for nearly 10 years now, I would say things are fairly difficult and have been for around the last 3 years. We have tried moving with the times and have tried specialising in various areas, some with success, some not! Theres always a demand for cheap cars, but with them usually comes hassel and grief with people expecting an immaculate 12 year old car for £600!
Then theres the mid rage £2000 - £5000, money that can buy a 6 to 10 year old car with sensible mileage and good history, but then someone expects to haggle a huge discount and wants top money for their knackered trade in!
As always, the trick is in good stock buying in the first place. The problem here is that there is a reducing amount of good stock out there because people are generally keeping hold of good cars and only getting rid of vehicles which are past their best. This in turn means that all the traders are chasing the same few good cars, which then pushes up their purchase price. This then means that the trader has to ask much more for the car when putting it up for sale.
However, when Mr Smith does his internet search for said car, he sees several pages of cheaper cars first and so is un-likely to even ring and enquire about the higher priced car. This means the trader gets lumbered with a depreciating car, and ends up having to reduce the price to get interest and the stock, ending up just trying to recover his money.
End result - lots of time and expense, but no proffit. This process becomes un-sustainable after a very short period. This in conjuction with increases in overheads - Property rent, fuel, insurance etc becomes a very slippery slope, very quickly!
I gave up trying to sell 'run-of-the-mill' cars, as theres just too much competition and people want something for nothing these days!!
Then theres the mid rage £2000 - £5000, money that can buy a 6 to 10 year old car with sensible mileage and good history, but then someone expects to haggle a huge discount and wants top money for their knackered trade in!
As always, the trick is in good stock buying in the first place. The problem here is that there is a reducing amount of good stock out there because people are generally keeping hold of good cars and only getting rid of vehicles which are past their best. This in turn means that all the traders are chasing the same few good cars, which then pushes up their purchase price. This then means that the trader has to ask much more for the car when putting it up for sale.
However, when Mr Smith does his internet search for said car, he sees several pages of cheaper cars first and so is un-likely to even ring and enquire about the higher priced car. This means the trader gets lumbered with a depreciating car, and ends up having to reduce the price to get interest and the stock, ending up just trying to recover his money.
End result - lots of time and expense, but no proffit. This process becomes un-sustainable after a very short period. This in conjuction with increases in overheads - Property rent, fuel, insurance etc becomes a very slippery slope, very quickly!
I gave up trying to sell 'run-of-the-mill' cars, as theres just too much competition and people want something for nothing these days!!
4 Days into this month and only 1 out of 5 salespeople in my dealership have sold a car.
Last month wasn't as bad as we thought, this month probably won't be great.
I've a couple of high value deals going out from last month though, so at least a small bit of commission already secured.
This time of year is always quiet TBH, people have christmas to think about....
Last month wasn't as bad as we thought, this month probably won't be great.
I've a couple of high value deals going out from last month though, so at least a small bit of commission already secured.
This time of year is always quiet TBH, people have christmas to think about....
I had my worst month last month in 16 years of self employment, very low on numbers. Started month off well in December selling 3 cars on the 1st, all with decent margins.
Interestingly I have about 10 cheapies in stock, at under £2K, and we have only sold one car under £2K in last 8 weeks.
£2500-£6000 seems to be our selling level.
One thing we are finding is many buyers do not have the money to buy a car. They are borrowing off relations, cashing in ISAS and the like.
We have had a better 2nd half of the year than first, mainly due to manufacturer backed 0% over 5 year deals on new cars. However the new car side of the business has went quieter over the last 4 weeks or so (long factory order times arent helping). Thankfully over the last week to ten days we have seen an upturn in our used stock in the £4-7k mark, even moving a couple off cars which had more than over stayed their welcome. However I do expect December to be quiet (as it always is). We generally find things will be quiet into around the second or third week of January where we see an upturn in the run up to March.
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