12:21 pm, February 25, 2008
USED car dealers are having to work harder to acquire retailable stock in the face of a shortage of quality part-exchange vehicles, according to CAP.
Dealers have been reporting for some time that they can no longer rely on customer part-exchanges to re-stock their forecourts with high quality used stock. But as retail demand for used cars grows a majority of dealers report that they are having to work hard to find good cars.
Research among dealers in February revealed that around three out of four believe good quality stock is hard to find in the current trade market, while about a quarter report that there are plenty of retail quality cars available.
However, the main problem lies in the area of part exchanges, which have always provided used car dealers with an important source of retail stock. Asked whether the standard of part-exchange vehicles has changed compared with a year ago three out of four dealers said they were now offered fewer retail-quality part exchanges.
Two factors lie at the heart of the problem for dealers. The growth of online channels for private car sales means more customers are turning their car into cash before visiting the dealer. And those cars which are offered in part-exchange often tend to be higher mileage and in worse condition than a year ago, according to 58 per cent of the dealers researched by CAP.
Colin Whelan, Business Research Manager at CAP, said: ‘There is no serious stock shortage across the market in general but our research does suggest that many used car dealers are struggling to find the right cars for their particular forecourts. Although this makes business more difficult for dealers, the clamour for high quality stock does indicate that the market is in overall good health.’
