AM Online

Dealers paying too much for trade-ins

It would be an understatement to say August was quiet as the used car market appeared to be on holiday, but in the background preparations for new September registrations were in full swing.

Dealers have been trying to entice retail buyers into the showroom with the use of national and local press advertising about the new registration system.

However, plenty of dealers are reporting that most retail customers walking into the showroom are unaware of the new system, even though cars are out on the road displaying the new plates.

The expected over-abundance of quality used cars, up to three years old with low mileage, entering the used market via part exchanges has been disappointing.

Many dealers have stressed concerns over the quality of cars being traded in. Most fall short of being retail material without a lot of time and money spent on refurbishment.

This means that the pressure is on the sales staff to appraise cars correctly and not look at them through rose-tinted spectacles. Sometimes there is a tendency to oversell the car when it comes to presenting the deal to the sales controller or manager. This is a way of making a quick deal, but someone will have to worry about the consequences later.

In my experience there are few three-year-old cars with sensible mileage that you could describe as Cap Clean, because in most cases they will usually require some refurbishment work to be carried out.

This particularly applies where manufacturers use waterbased paints and light colour primers, which don't stand the test of time very well. These will inevitably need at least one panel of paint before the vehicle is ready for retail.

In this scenario, the seller may receive more money than their car is worth leaving the dealership to stand the cost of the extra prep that is required.

Controllers must check a few cars personally rather than accepting the salesperson's appraisal at face value every time.

Dealers are also seeing some three-year-old cars traded in for the first time, such as the Ford Focus, BMW 3 Series, Mercedes A-class, Peugeot 206 and Skoda Octavia.p> These were launched in the UK in 1998 and will largely be entering the used market from fleet and leasing companies. Although a lot of these vehicles serve both the fleet and retail market, dealers always seem to be prepared to pay a substantial amount more for a car that is physically on site and privately owned than they would for a fleet car sourced at auction.

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Comment as guest

Login  /  Register


No comments have been made yet.