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CAP trade watch: Good quality part exchange volumes are decreasing

Research has now confirmed what has been anecdotally reported for some time now – that good quality part exchange volumes are significantly down and reducing.

Dealer after dealer is confirming that customers are increasingly coming in with cash, having sold their car already. Those who do have a part exchange to offer are often tending to demand unrealistic prices.

A large part of the reason for this trend is the internet and the ability and willingness of retail buyers to do their research thoroughly before taking the step of even talking to a dealer.

One piece of research focusing specifically on this issue has revealed around seven out of 10 dealers confirming that they are seeing fewer retailable part-exchange cars offered, while most of the remainder – just short of one in four – noticing little or no change.

In the case of part-exchange condition, 57% of dealers researched report that the cars they are currently being offered tend to be older, higher mileage and worse condition than a year ago.

Again, nearly one in four, however, say they are seeing little or no change.

This is not creating particular headaches for dealers as they are tending to be increasingly selective about acquiring cars for stock anyway. The often quoted phrase is about not buying work.

For smaller dealers, the issue is of no real consequence as they are happy to retail older, cheaper cars. Indeed, one commented that he was finding it easier than ever to retail out of his part exchanges precisely because they are ‘cheap and cheerful’.

This trend does, however, remind us what a significant impact the internet is now having on the used car industry.

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