12:40 pm, June 7, 2021
Car dealers are retailing as many as one-in-four cars too cheaply, new data suggests.
Indicata said it’s identifying cars every day that are below current market values.
The firm says some dealers are not re-pricing cars since showrooms were allowed to reopen on April 12.
It comes as Auto Trader warned last week dealers need to stay on top of prices to ‘reflect the positive movement of the market’,and Cazana told the Car Dealer Podcast retail pricing isn’t following huge increases in trade values.
Indicata said that many used car prices in stock either remain static or are being marked down while market prices are rising and demand is exceeding supply.
Jon Mitchell, Indicata’s group sales director said: ‘From a consumer’s perspective when a used car looks too cheap during an online search, they immediately think it has been wrongly described, or it is likely to have been sold.
‘Dealers have to stay in tune with current market prices to help build consumer confidence with online buyers.’
He added: ‘And for the past few weeks that has meant checking market values daily and then increasing rather than reducing prices.’
Indicata’s latest findings revealed two examples where dealers increased prices and successfully shifted stock.
A Ford Fiesta listed at £6,995 sat at 94 per cent of its market price after 35 days in stock.
According to the firm the dealer planned to reduce it, but as the average market price had risen to £7,436, it advised them to increase the price by £500.
The car sold that weekend at screen price.
Meanwhile, a BMW 5 Series was listed for sale by a franchised dealer at £29,500. After 50 days in stock, it had been reduced four times to £27,000.
In this time the market price had fallen and then increased to £29,500.
The dealer car was cheaper than its competition and looked out of kilter on its website, so Indicata encouraged it to increase the car back to £29,500 and it sold four days later.
