Wake up car dealers – the bubble is about to burst

As a motor dealer of hopefully some intelligence and part time contributor/ writer here at MTI, it’s clearly in everyone’s interest to give the best and most up to date motoring advice we can, but this week I simply ask any of you wanting to purchase a car and needing that “up to date advice” to bear with me for just a moment. Thank you.

This week I want to address my fellow beleaguered colleagues in the trade and ask them one simple question. Why on earth, after everything that has been reported in the press and indeed here at MTI on these very pages, are we continuing to pay these frankly ridiculous prices at Auction when the exact same cars are readily available in the regional motoring magazines for far, far less, if the figures are to be believed, which on the strength of my own three private purchases this week they are!

Have we lost the plot? Are we being conditioned by the need to fill gaps on our forecourts at ANY price? Are we really expecting you, the consumer, to have to pay the extra uplift in mark up on these forecourts without question? And more importantly can we afford to think you will continue to do so?

Time and time again we dish out good advice (hopefully) to help you in your search for the very best deals available out there, but show me any website, blog, or magazine that gives any advice to us “should have known better” motor dealers and I will “eat my trilby” as the saying goes. Judging by the way arms are still shooting up at auction and heads nodding furiously we certainly need some advice and fast!

Why on earth is a 2004 Audi A4 “Avant” 2.0 FSI albeit with 37,000 miles over £400 dearer at Auction than in the pages of a well known motoring magazine? Or a 2006 Jaguar 2.0D with 52,000 miles £300 dearer than the exact same car with just 34,000 miles and in a better colour, in the evening paper? Or worse still, why do Ford Ka Luxury’s, Vauxhall Corsa SXIs, VW Polo’s and other premium small cars continue to make, on a regular basis, up to £500 more at Auction than the same cars on the net or in the private ad’s? Why indeed.

We all know why don’t we? Because we will pay it! Because none of us can resist the pull of the auction hall or the dulcet tones of our favourite auctioneer, all that shiny new metal just waiting to be snapped up ahead of the other fools, it must be worth it, just look at everyone else bidding!

But wouldn’t it be great if just for one week, (that’s all it would take) we all turned up at our respective Auction Houses and didn’t bid! That’s right, we didn’t buy a thing. We just watched those big smiling faces that beam down on us from up on high on the rostrum turn to despair. Wouldn’t it be fun watching the vendors as car after car rolled through the halls unsold! It would be worth going home empty handed just to see the repercussions in the press and the effect on prices the following week.

But it’s never going to happen is it? We all need good stock and it’s impossible to keep our hands in our pockets and stop our heads from moving the moment that “perfect bit of stock” comes into the ring, and let’s face it, the Auction House’s will always be the easiest and most accessible places for most of us to buy, but the real worry here is at what cost?

On a more serious note the upward curve in prices cannot and will not continue for much longer, it simply can’t be sustained. Every market has it cut off point and I, for one, believe we are getting dangerously close to it. Have we all turned into “Estate Agents”? Are used cars the new House Prices of the past? Have we learnt nothing about market forces? Let’s hope not for all our sakes. This is one bubble that needs to deflate very slowly indeed in the process, allowing most of us to come out of this current madness in prices relatively unscathed, because when (not if!) it does burst there is going to be a spectacular fallout.

We owe it to ourselves and our future customers to keep a very firm eye on the current market place; do we really need to buy that piece of stock no matter what it costs? Can the more sensible amongst us stand back and evaluate what is happening in our industry? And just as importantly are we capable of seeing further than the short term gains in having a fully stocked site?

As a spin on that famous Morecambe and wise line, “We may have all the right cars but not necessarily at all the right prices!”

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4 Responses to Wake up car dealers – the bubble is about to burst

  1. Cameron October 7, 2009 at 10:26 pm #

    This auction fever period is coming up for its anniversary soon. In 2008 I bought around 250 from auction, this year I’ve bought none. I use the same rule of thumb I’ve had for the last 20 years I’ve been buying cars, only put your hand up if you think it represents value for money.

  2. davexx October 8, 2009 at 8:56 pm #

    Good point but where do you get your stock from,all the major players put their unwanted choppers through the ring now,so you cant buy from them and ebay has had its day for trade sellers!

  3. Mark Robbins October 11, 2009 at 6:16 pm #

    What do you mean when you say “Ebay has had its day for trade sellers”? the trade cant source their stock this way or the trade cant sell their stock this way?

  4. davexx October 11, 2009 at 11:19 pm #

    the trade cant sell this way,not like 2 yrs ago we were selling 20 a month now not even 5! unless we ar missing something the recession has put paid to eby for the trade seller,not sure what to do now

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