It’s going to be a nervous September

As September is almost upon us and we have enjoyed such a lovely warm summer! What better way to cheer yourself up than to buy a new car. Manufacturers and dealers alike are well behind the eight ball when it comes to like for like targets so the competition will be vicious. The great thing however in all this doom and despondency is that the consumer is in line to get some of the best new car deals ever seen.
I would say from the inside that many dealers are struggling to convert leads to sales at present and this is due to general market conditions and the credit crunch etc but mainly because the market is in danger of stagnating. On the one hand you have showrooms giving fantastic headline offers on many cars and lots of new products coming to market coupled with first class finance offers, but on the other hand a reluctance to take in a part-exchange for fear of not being able to offload it for its market SIV (stand in value). I know of several dealers who, for example have been trying to obtain a price for a big 4wd from stockists of that product and who have contacted 15 different dealers for a firm underwrite and have been unsuccessful, and therefore reluctant to get caught overtrading (standing a trade-in at an unrealistic price to sell the new car) meaning the wheels stop turning and sales are not being completed. I have even heard whispers that some dealers are in danger of losing all the potential profit they may make in September on new cars by losing on the part-exchange’s coming in.

In some cases when a customer orders their new car it could be up to 4 months before that car is built and ready to collect especially if a customer has ordered something very specific with lots of extras, or it’s a new model with limited supply. If this is the case and that dealer priced a gas guzzling luxury car for 3- 4 months down the line, it could mean catastrophic losses given the sharp downturn in the value of these cars recently. So what does that mean from a customer perspective, well firstly if you have small low cc family 5dr hatchback up to 5yrs old you stand a real chance of obtaining a superb deal as these cars are generally seen as the “cherries on the cake” at present (think cheap to run, insure, maintain etc) but also these dealers should be rolling out the red carpet ensuring that the service they offer you is as good as the deal they tempt you with.

Watch out for big savings on models which are being run out (replaced with a new model). As dealers/manufacturers look to clear the decks there will be some big savings to be made across the board especially with the volume brands such as Ford, Vauxhall, Renault, Peugeot and even VW but also some of the higher end marques such as BMW and Mercedes. Although don’t expect the same savings on the eco-friendly cars which appear to be the few profit opportunities that the trade currently enjoys. With people going greener every day expect to pay for it too.
Also watch out for those add-ons finance, GAP, paintwork protection etc. whilst they might be what you are looking for they can often be expensive and as we are always pointing out sales staff are being heavily targeted to upsell these products so don’t be afraid to haggle where necessary.

Lastly you may notice another change in the service depts. you visit (the coffee getting better for one!) but now more luxurious surroundings glossy up to date lifestyle magazines DVDs and lots of smiling faces, but be on your guard like we keep saying with the shrinking profits on car sales watch out for glamorous pretty service advisors on hand to tempt you into having all that work quoted done right now or offering you a lift to work and back while they relieve you of more money, or having your car cleaned for £10 where it used to be free, always check your estimate and ask about each cost and the effects of waiting to have some of the work done at a later date, and don’t be afraid to take your car and estimate away and compare elsewhere as you may be surprised to save a few hundred pounds from the bill by carrying out this exercise. So September if you want a new car our advice is to wait until right at the end of the month (if a dealer is very near their target it will sharpen their pencil still further) don’t be afraid to ask for more, and finally be totally satisfied that you are happy with the whole package before parting with any money!

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