At last we are getting reports that trade is becoming brisk again, deals are being done and buyers, fed up with talking about the cold, are finding comfort in the warm inviting showrooms where the nice people there talk to them about cars.

Interestingly many dealers are telling us that the business is being spread over the course of the week, rather than traditionally concentrated at the weekend. There has been a slowing down of scrappage deals and, as we have reported, many car makers and their franchises are looking to ‘keep the kettle boiling’ by introducing their own cash for scrappers programmes in anticipation of the expected dearth of quality used retailable cars in the coming months.

We are also being told that buyers are keener than ever in ‘lumpy’ cars as we say meaning cars with much higher specification than the norm. Dealers are telling us that specification sells and premiums are being paid to source a low mileage vehicle with all the ‘toys’.

The fact is that a larger percentage of cars on the market have fairly high specifications as standard. It’s therefore not enough to have multi airbags and electric windows, cars now must have a/c, alloys iPod or multi CD systems just to ensure the car receives an enquiry, except if it’s very cheap,

There seems to be two types of customer; those shopping purely on price and those more model and specification sensitive. A couple of other ‘insiders’ are reporting big demand in 4wd vehicles but whether that is hangover from the bad weather or a seasonal trend remains to be seen. The overall trend in 2009 was towards the smaller economical car with residual values on 4wd’s being hit hard enough to push monthly payments up to unaffordable levels.

Clearly lenders are still being ultra-cautious in protecting their residual values and ensuring that the borrowing criteria means that bad risk is kept to a minimum.

As one owner of a franchised car dealer in Bedford told us, with more people than ever are opting for PCP’s when funding their vehicles, with guaranteed future values ensuring plenty of equity at the end of an agreement, the next 2-3 years should ensure that customers can look forward to having a sizeable deposit without necessarily putting in much more cash to fund the next vehicle.

Get a CAP Used Car Valuation for just £3.50 - What The Professionals Use

The Motor Trade Insider Guide To Buying New Cars

Search terms for the article:

• risk of used car business