Dealers face stocking challenge
publication date: Feb 26, 2008
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author/source: Robin Roberts
Dealers are having to work harder to acquire retailable stock in the face of a shortage of quality part-exchange vehicles, according to new research from industry benchmark used car values provider CAP.
Dealers have been reporting for some time that they can no longer rely on customer part-exchanges to re-stock their forecourts with high quality used stock. But as retail demand for used cars grows a majority of dealers report that they are having to work hard to find good cars.
Research among dealers in February revealed that around three out of four believe good quality stock is hard to find in the current trade market, while about a quarter report that there are plenty of retail quality cars available.
However, the main problem lies in the area of part exchanges, which have always provided used car dealers with an important source of retail stock. Asked whether the standard of part-exchange vehicles has changed compared with a year ago three out of four dealers said they were now offered fewer retail-quality part exchanges.
Two factors lie at the heart of the problem for dealers. The growth of online channels for private car sales means more customers are turning their car into cash before visiting the dealer. And those cars which are offered in part-exchange often tend to be higher mileage and in worse condition than a year ago, according to 58 per cent of the dealers researched by CAP.
Less than ten per cent report that cars offered to them in part exchange are younger and lower mileage than a year ago. About a third report that they have detected no significant change.
These findings closely mirror the views of dealers reported a year ago. This suggests that the issue of acquiring readily retailable used car stock through part-exchange deals is an ongoing challenge.
Colin Whelan, Business Research Manager at CAP, said: “There is no serious stock shortage across the market in general but our research does suggest that many used car dealers are struggling to find the right cars for their particular forecourts.
“Although this makes business more difficult for dealers, the clamour for high quality stock does indicate that the market is in overall good health.”
The CAP research was backed up a survey undertaken by British Car Auctions at their sales.
As the new car registrations hit the road on Saturday, there will be a swathe of used cars going onto dealer forecourts as the result of part-exchange deals.
Now is therefore the time for used car buyers to make the most of a great range of choice. But what is it that used car buyers are looking for when buying from a dealer? Leading car auction company, BCA (British Car Auctions), has revealed the findings of research into why used car buyers choose a particular dealer – with some interesting results.
As part of BCA’s Used Car Market Report research, used car buyers were asked to rank the fifteen factors they believe are most important when choosing which dealer to buy from.
Not surprisingly, a whopping 50% of used car buyers put ‘exactly the car wanted’ as their number one factor for choosing a particular dealer for their next used car. “Our research suggests that used car buyers often know exactly what they want, with 50% having an ‘exact’ car in mind and therefore hunting down the dealer that has that make and model”, confirmed Tim Naylor, PR Manager, BCA.
“Another important aspect of the car buying experience is the support provided by dealer staff. Consumers placed ‘friendly and professional staff’ as their fourth most important criteria when choosing a particular dealer.”
Second most important for motorists is ‘best price possible’ however the offer of low finance was placed 14th out of 15, with only 3% suggesting it was important to them. But what was considered important when buying from a dealer was location and customer service – ‘Nearby and Convenient’ rating 3rd and ‘Friendly and Professional staff’ rating 4th. The advantage of having a warranty was also considered important, coming 5th in the consumer preferences.
‘Being contacted by dealer’ was rated as least important by motorists, with just 1% citing this as a key factor in which dealer they selected.
“March will definitely be a great time for a wide range of choice, whether buying from a dealer or at auction” ” concluded Tim Naylor. “So buyers should make the most of the influx of used vehicles as March 1st sees the new registration plates hit the road.”
Consumer’s top car buying factors
- Exactly car wanted
- Best possible price
- Nearby and convenient
- Friendly and professional staff
- Get a warranty
- Easy negotiation
- Wide choice of cars
- Get quick delivery of car
- Bought before
- Recommended by others
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