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Internet boost to Lookers business

Nearly half of used cars sold via Lookers' internet business are in areas where the group has no dealership representation.

Lookers finance director Allan Marston said the internet was a cost-effective way to widen the company's catchment area without investment in showrooms.

“We have sold cars from our Blackburn dealership to customers as far away as Cornwall,” he said. “And, although we offer a delivery service, they often want to come to us to collect the car.”

Lookers expects used car sales to pick up next year as residuals settle down and quality of part-exchanges improves.

The legacy of last year's new car pricing inquiry has been a flood of poor quality, high mileage part-exchanges from private buyers and fleets that held onto vehicles in anticipation of lower new car prices.

“Many fleets who extended contract agreements for a year are now changing their cars,” said Mr Marston. “But this means the cars they are replacing are higher mileage.”

Poor quality, high mileage part-exchanges have combined with the expense of offering guaranteed buybacks on Motability deals to drain profits at many dealer groups.

Mr Marston said dealers would “heave a sigh of relief” in February, when the Motability rules on guaranteed buybacks ended.

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