I’m old enough to have lived (and flogged used motors) through three recessions and I know that, while times are tough now, our industry can and will get through it.
We might lose a few colleagues along the way, the weaker dealers may struggle, but for the vast majority, with tough businesses, tough personalities and the mental agility to deftly sidestep the ridiculous nonsense that the media spout out of the nation’s TV sets and chip paper to scaremonger us all into bolting our doors and living off tinned food, there is a future, and it starts now.
Indeed, the used car market is a good barometer of the country’s economy as a whole.
Like the housing market and the new car market, the used scene is currently in a kind of limbo, ticking over, the odd car finding a new home here and there to people with savings, and everyone else waiting to see what happens next.
The single biggest complication, of course, is the lack of flexible finance. Two or three years ago, anyone could walk onto your lot and leave with which ever motor tickled their fancy, regardless of its screen price.
They could live in a caravan and earn £10 a week, but still drive around in a BMW 535i worth £14k providing they could leave the mortal remains of their old car behind as full deposit.
Meanwhile you, Johnny Dealer, pocketed the car money and a wee wedge from the finance company as your commission – everyone was happy, and you didn’t really care whether or not the customer defaulted on their loan and ended up minus their kneecaps.
These days, customers like that have disappeared, and the car industry is rapidly taking stock of the fact that about a third of its total sales were to people who actually couldn’t afford a car, new or used. Once the dust settles, and the auction houses have offered all the hideously maltreated, abused repo rubbish that destroys your faith in human nature, the used car market will find a balance again.
The customers will change – we’re constantly being told by the money experts that there are more savers than there are borrowers and this much is true.
The difference is that savers drive around in 10-year-old Escorts they bought seven years ago while keeping their vast personal wealth tucked safely away in a savings account, ISA or mattress, while borrowers drive around in as new a car as they can afford the monthly repayments for in order to appear rich.
So the rich drive crusty old bangers and don’t care, and the poor drive shiny new metal and do. It’s a funny old world.
Once savers, who know their financial onions, begin to realise that there really has never been a better time to buy anything, from a weekly grocery shop to a six-bedroomed detached, they’ll make their carefully considered purchases.
It is, after all, savers who do all the spending during a recession, and who keep it all to themselves at other times because they don’t want to pay over the odds. They play the game far better than most.
What this means is that good quality, unabused recent stock at a market adjusted price level will suddenly become prime fodder as those with a few spare pennies look to purchase their next long-term investment, while dog-eared rubbish bought on the never-never will be exactly where it deserves to be – in the scrapyard.
If nothing else, the recession will deliver a cathartic approach to the car market. No longer will the car be a disposable consumer durable that we all abuse and destroy, but one we look after, preserve and value – and that, dear reader, is where the good news comes in.
If people value cars and all the rubbish is flushed out the system, car values go up, your stock won’t lose its value so quickly that you have to boot it out the door just to get rid, and the used car market will be a calmer, less cut-throat place. If you can weather the storm, you may even look back at this as a real turning point… Good luck!