11:46 am, August 7, 2024
Cars made in 2020 and 2021 are causing headaches for used car dealers, with specification anomalies and removal making vehicles of that age difficult to value and sell.
According to the Vehicle Remarketing Agency (VRA) – an umbrella body made up of fleet representatives, rental companies and dealerships – the global semiconductor crisis led to an unknown number of cars reaching the market with specifications either altered or missing compared with the original specification sheets.
Marcus Blakemore, chairman of the VRA’s industry trends committee, said many cars were missing key items, leading to confusion for customers and dealers.
The shortage saw key manufacturing facilities closed, mostly in Japan and China, which make semiconductors and microprocessors for all areas of consumer electronics – domestic as well as automotive.
Blakemore said: ‘During the initial stages of the pandemic, there was massive supply chain disruption, especially around the availability of microprocessors.
‘As a result, manufacturers improvised on the production line, removing key items just to keep things moving.
‘Depending on the manufacturer and model, there are all kinds of items omitted – heated seats, head-up displays, electric door mirrors, electric seats and more.
‘Some cars were even built with analogue instrument clusters and clocks.’
He says this has led to widespread debate in the resale sector around spec removal and how much it affects the residual values of used cars, a lot of which are now being traded in and coming on to the used market at the end of three-year PCP deals and fleet contracts.
‘We’re now in a phase where these cars are starting to leave their initial owners and coming on to the used market, and they’re causing valuation issues among vendors, dealers and consumers,’ added Blakemore.
‘There is generally agreement in the used sector that few items of equipment add much value to any used car.
‘However, if there is equipment missing that buyers are expecting, it does make a vehicle more difficult to sell.
‘For example, if you’re trying to retail a prestige car at three years old that doesn’t have heated seats, it’s probably going to stick around on your stock list for a while.’
One of the major issues affecting dealers is the closed nature of many auctions these days, with traders unable to physically inspect stock, then finding that when a vehicle arrives the specification is different to what’s mentioned in the available data.
One of the biggest concerns raised by the VRA is the issue of dealers accidentally misdescribing a car only for it to then be rejected by the customer.
The Motor Ombudsman has confirmed this would be entirely acceptable under consumer law, specifically the Consumer Rights Act 2015, which requires a vehicle to be ‘as described and fit for purpose’.
Where a major element of a car’s factory specification is absent but a dealer has pre-filled an advertisement using one of the many data services available to motor traders, a dealer could potentially only notice a misdescription concern at the point it is raised by the customer.
The VRA has now set up a working committee to investigate the issues.
Blakemore added: ‘So much stock is bought ‘‘blind’’ by dealers and traders that many don’t realise they have bought a Covid car.
‘Nobody wants the drama of misdescribing a car, because it means unwinding the deal. We just want clarity.’
This article appears in the current edition of Car Dealer – issue 197 – along with news, views, reviews, interviews and much more! Read and download it for FREE here.
