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How dealers can increase profits from their used car operations

How efficiency impacts the used car market

Used diesel cars’ ability to command a price premium is likely to be eroded over the next few years as customer awareness of the improvements in petrol technology increases. Jay Nagley, RedSpy Automotive managing director, said: “The public perception is that diesel is a better long-term bet because over the last 10 years they have got so much better.


“However, most people don’t actually do the maths and work out their own personal mileage, the premium they have to pay for diesel and what the breakeven point is.

“Perception always lags behind reality, but it does tend to catch up in the end. Over the next few years, there will be a growing realisation that the latest generation of petrol engines have narrowed the gap on emissions and efficiency.”

Dealers are also still wary of taking on electric vehicles (EVs) for their used car forecourts and Nagley believes they’re heading into a trough.

“The early adopters have bought their EVs but now manufacturers are having to appeal to the mass market and a lot of customers are still suspicious,” he said. “A lot of dealers are waiting to see if they’re proven to be reliable as a used car prospect, but it will still be a few years before we know for sure.”

Nagley likened the situation with used EVs on the market to how the Toyota Prius hybrid was initially treated with caution.

“Dealers were very nervous for the first couple of years as hybrid technology was untested in the mass market. In the end, the Prius did establish itself as reliable in the used car market.

“EVs will have to go through that same pain barrier for a couple of years until they become trusted and then they can establish their true value.”

Next page: Sell the car first and the deal second

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