July 23, 2014

Dealers will soon buy any car

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Sooner or later all car retailers will need to realise that as the new car market shrinks, or at least finds its natural level, it will naturally have a direct impact on the sourcing of used cars down the line.

We are now seeing companies like webuyanycar.com or we willbuyyourcar.com having tremendous success in buying cars direct from the public, and with catchy adverts highlighting the way in which they can make the process easy for the consumer anyone hoping to compete on the same terms will have some catching up to do.

The reality is that most people who will use these companies for a valuation will nearly always need a replacement car but are either unaware of a dealer taking part exchange, suspicious of the valuation they may receive or, worse still, reeling from the apathy shown by the dealer in professionally valuing their existing car.

Sites like webuyanycar.com et al feed consumers the line that by selling your car to them you are in a better position to negotiate with a dealer on your next car because there is no car to trade in. The reality of this, of course, is that these cars need to be recycled back into the system and ironically are being bought by the very dealers who may have taken them in part exchange in the first place!

Now obviously sites like WBAC need to make a profit otherwise why else would they bother? So by them taking your car and selling it on to a dealer for a profit, who then sells it back to the retail market for another profit, is selling your car to these companies really going to give you the best price?

Maybe not but because they have exploited the fact that some franchised and independent dealers are clearly not delivering the service or getting the message across that they actually want to take your old car off your hands as well as put you in a new one. These dealers are missing out and allowing the buying sites to take over.

One of the reasons for this, in our opinion, is that new and used car dealers are often so focused on selling their cars, and sales people under such pressure to clinically follow a sales process to get the best chance of selling their product, that they are forgetting one fundamental aspect of the whole process; a major factor in the car buying decision process, from a customer’s perspective, is how much they will get for their existing car.

When the buyer knows how much their current car is worth they know what sort of budget they have to buy the next car.

We are sure some of the older ‘trade’ guys will remember, before internet adverts and big sales promotions, a salesperson had to work much harder to get customers to the showrooms which were never the salubrious surroundings they are today.

When things were very quiet the manager would send us out on the streets with our business cards which would be placed under the windscreen wipers of the cars you wanted to buy.

It wasn’t exactly rocket science, these cars were older versions of the cars you were selling. Printed on the back of the car were the simple words “we want to buy your car, please call me ASAP for the best price”.
This may seem quite basic and random but like any form of sales it’s a numbers game and the more customers you reach out to the more chance you have of selling cars.

Clearly in recent years this message has been lost somewhere, and as a result of this sales are being lost and those thousands of customers selling their cars to WBAC and the like are potentially being lost to the retail network of the product they are interested in.

Consumers under the illusion that “cash is king” and no trade-in equals a better deal will no doubt also feel confused when, let’s be honest, when you sell your existing car and buy your next one it can (and should) be as easy and painless as possible. Dropping your old one off and picking your new one on the same day has got to be the best option.

Unfortunately the growth of these buy your car sites tells us that new and used car retailers are not doing the job properly. They are not making it easier for customers and not making it viable for themselves by failing, or not bothering to give a proper value and missing out on the sale of one of their own cars.

It surely can only be a matter of time until a large dealer group will realise that they need to be buying these cars from the public direct themselves by setting up their own webuyyourcar type websites but with the added potential of selling them another car in the process.

Finally to check this out we got a few of the guys to pose as customers who wanted to sell their car and get a value, and not one of the dealers we rang were prepared to give us even a guide price unless we came to the showroom and the others are still waiting for a call back.

With time being precious and important to everyone we think it’s time for dealers to maybe be a bit more flexible and respond more readily to customers’ needs.

Failing that they risk losing out on more cars and more customers and in these trying economic times that probably ranks pretty high on the stupidity scale.


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Comments

  1. Car dealers here in Malaysia have been using this method to get the car that their customers want by buying out cars and selling to them. Its not new and it all started indiscreetly when customers requested these car dealers to get the right car. Well, as a car dealer, fulfilling customer needs is top priority and at all cost, right?

  2. Mark Robbins says:

    Interesting take on the “Part Exchange” conumdrum, and in more ways than one you are correct, although WBAC and others offer far lower prices than many would get in the trade for their P/X, it is the very fact that they really do buy ANY car thats the pivital point here, we always bang on about “selling cars”on this forum but at what cost? I have said this countless times before but the truth is (and it happens every day on our forecourt) that many of the cars presented for trade in are simply too hard to resell again at a profit, especially back to the trade, far to many customers unfortunately have these cars to trade in, therefore any company that buys ANY car is to be welcomed (although i agree it comes at a price in terms of good stock) after all, who wants a back yard full of French, Rover, Saab, and other dubious part exchanges that are only going to do the rounds at auction and more often than not fail to attract the bids? as for asking for a price over the phone i am not surprised at the responce, no dealer i know would ever dream of giving such information, with models and spec varying so much and customers rarely describing their cars properly you need to see the “product” with your own eyes first, plus we are not a free valuing service for every tom, dick, and harry that wants a price for their car with little or no intention of buying. Genuine customers welcomed with open arms, for others there is always WBAC !

  3. Some good points there Mark, but surely the fact that WBAC and the like are giving prices before seeing and then chipping them on appraisal, means that there is some mileage in making it as easy as possible for the customer, and whilst I agree that many of us dont have bottomless pockets and therefore buy the cars we think have best chance of making a profit, I am constantly being offered (and seeing at auction) cars which have come from the WBAC route and are most definately ‘retailable’. I guess at the end of the day they are playing the numbers game and undrstanding that they will not make money on everything but because of the volume of cars will have more wins than losses.

  4. Mark Robbins says:

    Absolutely! couldnt agree more, however the article states that “Dealers will soon buy any car” all i am saying is that surely can never be so? if my team did deals on every car that came across the forecourt (no matter how well priced) we would soon end up with some very unsaleable stock! being honest and frank here, there is a huge amount of unwanted and unloved part exchange stock out their with potential customers who sadly you just cannot serve, you know the scenario, awful colour, no air con, three door, base spec, V6, V8, ridiculous mileage, French, Italian, the list go’s on, any fool can deal, its the right deal that matters.

  5. Am i being dumb i thought that was a referance to we buy any car.com,i think there is a big difference to buying a desirable px to buying a deal,thats how we end up with a load of c**p on the forecourt,but these guys seemed to have found a formula or maybe a load of mugs to buy the unloved cars you refer to!!

  6. Mark Robbins says:

    Quite right, they have found a formula, and there are dealers who will buy these sort of cars, lots of them, undesirable is always cheap! as for mugs, i am most certainly one of them, have had my fingers burnt so many times they practically drop off now, but not anymore, i simply WONT buy or deal on them. To go back to the original article does it not say that “Dealer groups need to be buying these cars themselves” and if we dont we are somehow not doing our job properly? my argument is that i prefer to be extremely picky with our deals and will, and do, turn down any that i deem to be not in our interest. financially, to me that is doing the job properly.