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Buyers and sellers 'all at sea' in wake of Competition Commission report

Over the past four weeks the used car dealer's job has become increasingly difficult. It has affected all sectors, from late-plate models to seven year-old vehicles.

There are several reasons for the problems currently besetting the trade. First there has been a slowdown in retail demand, driven in no small part by consumer uncertainty over new car prices and a general lack of public confidence in the motor trade in the wake of the Competition Commission report.

The findings of that report have created more confusion since not only are the public at a loss to know how and when to spend on a car, trade buyers haven't a clue what to do either.

The biggest impact has been on late-plate values, although we have spoken to dealers on a daily basis who will simply not buy certain cars. There are plenty who will just walk away from any late-plate cars. They will only buy something if there is a customer for it - but not for stock. A trade friend of mine retails cars in the £5,000-£7,000 price range.

Several of his punters have commented that they will not buy now because if new car prices come down so will his. It doesn't make any difference that there is no such simple relationship between new and used prices - the fact is that perception continues to do a lot of damage to business. And if his experience is anything to go by the problem is not confined to the late-plate market.

So the message we have been passing to disposal people is to clear the decks. Many are still putting cars into auction with unrealistic reserves, not taking heed of the state of the market and the buying activity - or inactivity - out there. They need to be flexible and move on a weekly, if not daily, basis and keep their reserves under constant review.

What retail punters have demonstrated is that until they see a reduction in retail prices they are not prepared to take any chances with their money. Although some manufacturers may find this politically difficult to tackle, an actual visible reduction is all that will appease the public.

I believe we are in a blip - albeit a serious one - rather than a significant trend. It is going to be difficult over the next few months but once there is a resolution the trade will work through it.

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