5:14 pm, November 17, 2008
IN CASE you hadn’t noticed, the media has recently worked up the whole developed world into a frenzy about money – and for anyone who sells things for a living, no doubt including yourself as a pre-cherished vehicle relocation specialist (never, ever admit to being a car dealer), this is not good news.
The reason for this is two-fold. First, people stop borrowing money because they’re scared they won’t be able to pay it back; and second, they stop buying things with the money they have got tucked under the bed (it was in the bank, but they panicked and stuffed it all into a shoebox).
Obviously this is just in case they need it to spend on tinned food come the imminent Armageddon – or maybe I’ve just spent too long with my nose buried in the Daily Mail.
Irrespective, you either accept you’ve got a problem and change your business to react accordingly, or you strap on the blinkers and charge headlong toward receivership (which, as many a defunct and reinvented car dealer might tell you, isn’t always a bad idea, but for the purposes of remaining within the law, I’ll stop myself right there).
Assuming you’re a straight and honest individual – and in all fairness, the tin-pushing industry has cleaned up its act somewhat over the past couple of decades – then you should do what I’ve done for the past three and a bit decades and decide how you can turn every challenge into an opportunity.
For the used car market, opportunities abound at the moment, and seeing as these days I’m only part-time and tend to trade in specialist vehicles, I’ll share with you a little tactic that helped me through the last recession.
The answer is to look beyond the obvious, and move away from some of the trends that you may see your rivals moving towards. In this regard, I’m not suggesting you replace your traditional finance sources with my old mate Eric ‘The Shark’, who was guaranteed to find a loan for any customer regardless of their history, bugger the APR rate, but to instead focus on how to make your stock attractive to customers who are keeping an eye on the pennies.
The unimaginative among them, who queued for three days in the pouring rain last autumn to draw their holiday spending money out of Northern Rock, will follow some of the sage advice offered by the more predictable car magazines, and go off to find themselves a used Toyota Yaris, Honda Jazz or other reliable, fuel-sipping tiddler.
The braver, bolder or just plain sensible will, however, recognise that the increase in demand and in screen price on such motors is more than they’ll ever save by running one of the things in the first place, so instead they’ll avoid all the market niches and buy as much car as they can for not a lot of outlay.
Last time we were plunged into recession, I went to the auctions, watched my trading colleagues panic buy Fiestas, Novas and Peugeot 205s at stupidly inflated prices, then filled my own lot with Granadas, Carltons and Rover 800s, bought for pennies in a market that shunned them.
I then sold them on for a few more pennies, at prices that looked like I was practically giving them away, to customers who mistakenly thought they were ‘doing me a favour’ getting them off my forecourt.
Price anything cheap enough, and it will sell. So if you head towards the most unpopular cars in the market right now and buy them at rock bottom, you can still make them look cheap when you sell them on.
So, while I wouldn’t advocate filling your lot with V8-engined Range Rovers right now (even if they are phenomenal value) I’d leave the small stuff to the dealers chasing the hyped-up Daily Mail readers, and buy up all the decent mainstream family motors you can get.
There’ll be plenty around at silly money, and among those who’ve thought beyond the end of next week, there’ll always be a market for big, safe family cars that cost pennies to buy, and don’t cost the earth to run. If you don’t believe me, carry on as normal, and if you need The Shark’s phone number drop me a line…
Big Mike 3: Young gullible and stupid
Big Mike 2: How the french do it
