8:18 am, October 8, 2008
CAR dealers are becoming increasingly diligent in their new and used car tradings.
It’s a direct response to more challenging market conditions, says used car trading network autotrade-mail.com.
The company has observed that hits to the provenance sections of dealers’ profiles are higher than they’ve ever been.
This suggests that buyers and sellers want to know the full background of who they’re dealing with before they commit to a deal.
As director Kevin Watson explained, ‘There is no doubt in my mind that our members are verifying and conducting more checks wherever possible before purchasing or selling a vehicle. This is essential business sense.
‘It is without question that one has to apply more due diligence within these difficult times. The current banking crisis will cause some good businesses critical cash flow problems, so it is very reassuring to us that our members are acting with greater care.’
It’s all about spending your dealership’s money responsibly, said Watson. He draws parallels with the last recession, back in the early ‘90s. Back then, a dealership’s ‘good name’ alone was not enough.
‘You had to ensure that your parts exposure was not too high, that your debtor’s list was on your desk daily, that you not only provenance-checked every vehicle, but sought confirmation from the lender that the outstanding finance was cleared and you wouldn’t transact on a single purchase until you had either the goods or had been paid.’
Is your dealership being as cautions? Maybe it’s time a memo was sent around – history says it could be an important one…
Watson also commented on the general market situation. ‘The recent decline in values has led to many new car dealers alienating potential new car consumers by offering unavoidable derisory trade-in values.
‘The obvious impact in the short term is that there has not been the influx of quality used cars normally generated at this time of year. Hopefully this will now have a knock-on effect of stabilising prices.’
