Guest opinion: changing stock levels boosts the importance of the 'one owner from new' part exchange

CAP looks at the challenges in sourcing used stock for dealers across the UK, using research exclusive to AM.

"In the franchise dealer sector, as you would expect, they have a high proportion of their stock sourced through natural part-exchange from new-vehicle sales, and less focus or necessity to purchase direct from consumers.

However, this has grown in recent years, with the increasing presence of the ‘cash for cars’ operations taking much-needed quality retail vehicles.

In contrast to the franchise dealers, supermarkets have a reasonably equal coverage across part-exchange, auctions and re-marketers.

This is due to the high volumes, quicker stock turn and profile they operate, and don’t have the new-sales market to entice the retail part-exchanges.

Again, as with the franchise, they have a small proportion in the direct purchase, as this is an area that a high coverage of the network will offer but not necessarily actively market.

The independent sector has greater flexibility to spread its reliance across various stock sources, and as the results illustrate, are proactive in buying vehicles direct from consumers.

A number have built websites, and are actively searching the consumer sector for vehicles.

The survey results illustrate both the flexibility that the independents have, but potentially a higher need to source stock this way, as they haven’t got the comfort of new-cars to help entice the consumers in with their part-exchanges and manufacturer renewal incentives.

We have driven the consumer down this route, believing that they will achieve a more attractive deal if they go without a part-exchange to negotiate on and a cash alternative.

In earlier years, when stock was continually plentiful, this may have been the case – these days, dealers want the private, service history, one owner from new car and not always the ex-fleet ‘common’ vehicle."

What is your main source of used stock and what percentage is it (% out of 100%)

	Franchise	Supermarket	Independent
Auctions	11%	30%	24%
Part-exchange	56%	35%	28%
Direct purchase/cash for cars	8%	5%	29%
Re-marketers (B2B)	20%	30%	16%
Other	4%	0%	4%