2:08 pm, March 31, 2026
Independent car dealers have warned that rising preparation costs and ongoing stock shortages are putting increasing pressure on margins, with further challenges expected this year.
Speaking at Car Dealer Live 2026, independent dealer panel said that while the used car market has returned to a more stable footing in the first few months of 2026, profitability is becoming harder to maintain.
Stephen Douglas, owner of Really Easy Car Credit, explained preparation costs have risen dramatically in recent years making selling used cars for a profit even more challenging.
He said: ‘There’s been a huge increase in preparation costs. Even putting four tyres on a car now, we’re talking £300.
‘I rewind the clock back 10 years – I was spending that on average to prep a whole car. Now I’m in £600 to £700 a car every time… it’s shortening the margins.’
The panel added that the issue is particularly challenging in older vehicles, where reconditioning costs and risk are significantly higher.
Umesh Samani, chairman of the Independent Motor Dealers Association (IMDA) and owner of Specialist Cars of Stoke, said that even the best prepared cars can still result in unexpected costs after sale.
‘It doesn’t matter how good an appraisal job you do, there’s always the unknown that comes back to bite you,’ he said.
We’re all fighting for the same cars
At the same time, sourcing the right vehicles at the right price remains the biggest challenge for many independents.
Samani commented that the issue is being driven by a shortage of vehicles caused by disrupted new car production during the pandemic.
‘The shortfall of the 2020, 2021, 2022 new car supply, that is having a massive impact now on all of us,’ he said.
‘We’re all fighting for the same cars and trying to get a margin out of them.’
Douglas echoed that concern, adding that the rise of online sourcing platforms has intensified competition.
‘You’re bidding against the whole entire country for the same cars,’ he said.
‘When there is stock there, I’m having to pay a premium for it because every man and his dog’s doing the same thing.’
George Manning, director of Hilton Garage, shared the concern about the looming shortage of mid-age vehicles.
He said: ‘My particular worry is the massive reduction in the five to ten year olds that are going to come up soon.’
However, he added that this is being compounded by a shift in consumer behaviour, with drivers now holding onto cars for longer.
‘The average ownership cycle is increasing… so there’s not going to be as many customers in the pot,’ he said.
The result, the panel said, is a squeeze from both sides; paying more to acquire stock while also facing higher preparation costs before sale.
