Rising book prices and a shortage of quality stock is driving dealers to source stock direct from private sellers, rather than using auction houses.
Trusted Car Buyers, an online car buying service that allows dealers to purchase stock directly from the public, says dealers are increasingly sourcing stock direct from the public, by contacting private sellers on websites such as Auto Trader and eBay, in an attempt retain margins often diminished by the middlemen.
Trusted Car Buyers believes this is because dealers are recognising the convenience and cost savings of buying stock direct from consumers.
It conducted research on CAP prices in September 2014 across 100 vehicles which were previously purchased at auction.
The data shows that the CAP average, including buyer’s fees and delivery costs (not including time spent out of the office), was 106%.
The firm also analysed 100 vehicles previously purchased via their dealer network. This CAP average was 96.4%, including buyer’s fees and time spent out of the office.
Leigh Charlesworth, head of pricing at Trusted Car Buyers, said there can be significant differences in the average CAP prices at auction, compared with Trusted Car Buyers’ stock: “Based on our research, a dealer could save potentially £48,000 on 100 cars, if they sourced their stock through us.
"This is a very large saving and it is a big pull for dealers. We know that acquiring quality stock at auction can be expensive and this is eating into potential dealer profits."
“We are working with our dealer network to supply them with a broad range of quality vehicles with attractive pricing, direct from consumers. By cutting out the auction houses, we give dealers the opportunity to increase their profits.”