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Auction companies in 'no win' battle with leasing companies and dealers

“There is an ongoing battle between different leasing companies and dealer groups for what they regard as the prime spots at auctions. There are good times and there are not so good times to put cars through the hall and it is the auction manager or one of their staff who has the unenviable task of deciding who goes where and at what time.

Some companies like to be on first, others prefer to go in the middle while others like to go nearer to the end of a sale. When this happens, and I am reliably informed that this is a rare thing, then everything in the garden is rosy. The problem starts when all the sellers want the same time in the same hall. Then the hard decision has to be taken as to who does get the prime slot.

Probably every auction and every manager has a varying policy and each will no doubt think it fair and proper. And according to those who enter vehicles on a regular basis, it is. The auction companies are in a no-win situation; you can't please all of the people all of the time and there will always be disposers who appeal against what they regard as an unfair decision. The answer lies in close liaison with the large auction groups, or smaller, independent, one-off sites. The manager should be able to offer the best possible advice not only about timing but probably more importantly, on what sort of car should be offered on any particular day, time and hall. Many leasing company disposers feel that some auction sites will do better with specific types of car because they have built up a certain reputation for them. As an example some auctions may achieve better prices more consistently for high mileage cars which are a bit worn looking. Some disposers feel more comfortable putting their tatty cars in one auction and more desirable ones in another. It is simply a case of knowing the trends, the market and the locations and the people who go there to buy on a regular basis.

The number of dealer groups regularly sending large quantities of vehicles to auction is something that has been growing over the years; so much so that the car trader no longer gets a look-in at dealer level. Consequently the range of cars on offer at different mileages and ages is now very evident. The choice has never been so good and the quality is getting better all the time. But this does mean that competition is also greatly increased, so with fewer buyers and more cars available from more sources, only the best will sell whatever the market or price range.

Cross-border car dealing
There is no evidence yet here in the UK but I have been reliably informed that cross-border car dealing is now having a few setbacks and upsets. The problem is caused when the importer doesn't pay the VAT due to the country in which it will be finally used. At present a new car can be bought in any European country and provided it is exported there is no VAT to be paid in the country where it was sold. The VAT has to be paid in the importing country within a certain period. However there are some unscrupulous dealers within Europe who are selling the vehicles on and then not paying the VAT, either by disappearing or going into liquidation.

As the law stands this leaves the supplying dealer with the VAT bill, or even the end user. So far only the supplier has had to pay up, but people should be warned that what is happening over the channel now may become a reality here soon, so beware.

US finance offers leaves industry in a mess
I had an e-mail recently from a friend in the motor trade in America who says that the industry is in a complete mess over there. This is mainly caused by some manufacturers offering 0% finance on new vehicles in an effort to get things moving again and restore confidence. This has worked, as registrations are well up, but the downside is that it is causing a tremendous build-up of used cars on dealers' lots. So, forecasting profits for the industry right now is proving very difficult. Sound familiar?"

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