We are in a fluid situation at present, most car people are just glad they are selling cars and finance and managing to keep their jobs. Lots of commentators have made predictions but the used carjuggernaught just keeps rolling on, or does it? It seems that although locating good quality retailable stock remains a challenge for many businesses in the car trade, it seems that being able to put any old ‘nail’ through the auction and watch it make a significant profit may be grinding to halt. Although demand for used cars seems to be moving forward unabated, dealers are starting to reason that if they really have to pay top money for any stock that goes on their display then it must be something that is low mileage, the best colour and spec, the right model and engine size but most tellingly something that is ”out of the box” to coin a well used motor trade phrase. This leaves dealers in a bit of a quandary potentially, as when all the usual rules when valuing a customer’s trade-in have long ago flown out of the window, it seems that now may be time for re-think. Because even though the right cars go straight from auction to valet bay to forecourt, the less desirable cars with patchy histories and multi coloured paintwork are now reverting to what they were a few short months ago, undesirable and therefore cheap!

Some dealers have been carried away by their success and, of course, the profits they have achieved at auction in recent months. So much so that some have commented it would almost be more profitable and a lot less hassle to put all their stock through the auction and not bother selling to customers at all, therefore not having to pay commission to salespeople. This of course is a very tongue in cheek comment in response to a rather unique situation, however if sales managers do not constantly assess the market and its current potential to change rapidly, those huge profits could quickly turn to losses.

Who, for instance, would have predicted six months ago, when the mere mention of buying a 4wd would have been met with utter derision, that these same vehicles would become like gold dust, making thousands more on the wholesale market and customers willing to pay the sudden uplift? I have even heard genuine stories of a customer who bought a 6 month old Range Rover in November, decided that he didn’t actually want it after all, sold it and actually made a £2,000 profit! What is the world coming to when houses depreciate and cars become an investment?!

Of course this situation cannot continue and eventually the market will find its true level, the first major holiday is nearly upon us and this could easily correct the market. But it is important for dealers and customers alike to keep on their toes and not get complacent. Dealers need to realise that the current busy showroom could just as easily turn and leave them wondering where their next deal is coming from. And buyers need to keep to the rules and ensure that the service and deal they achieve is what they desired when they set out on the car buying journey.

If the few friends that I have assisted in their recent purchases are anything to go buy, the buying fever is certainly not going to cool down anytime soon!

The Motor Trade Insider Guide To Buying New Cars