3:52 pm, May 6, 2020
Car dealer and TV presenter Mike Brewer has called on used car valuations firms to support the industry in this difficult time.
Brewer, who runs Mike Brewer Motors and sells around 7,000 used cars a year from Luton and Dunstable sites, said a dramatic drop in values would be catastrophic for his business.
He has called on car dealers as well as rental and leasing companies not to collapse values by flooding the market with stock when the industry is allowed back to work.
And he pleaded with the valuation companies – including Glass’s and CAP HPI – to support the car industry when they adjust values.
Yesterday, Car Dealer had an exclusive interview with CAP HPI’s head of valuations Derren Martin who told us prices could drop 3-5 per cent – and he also predicts the market will be incredibly volatile in the weeks after lockdown lifts.
Brewer said: ‘If that happens, my business will collapse, it’s as simple as that.
‘We’ve supported those two publications for the past 100 years. Now, for the first time we really need them to support us.
‘For them to think we can simply knock three to five per cent off the stock value of our cars could be disastrous for the used car industry.’
CAP HPI is due to start reevaluating used car values next week as the volume of trade deals begins to increase to a level where movement trends can be tracked more accurately.
Prices have not been adjusted in April or May at all – during the same period last year, Martin says, prices fell 5.4 per cent at the three-year-old point.
Martin said: ‘We are expecting a volatile market over the next few weeks but that could be in either direction, based off supply and demand. Any movements that we make will be based on the evidence.’
Brewer told Car Dealer Live today that when the lockdown was announced he immediately shut his two car dealerships and furloughed all of his staff.
Despite mothballing the business, he said on the show that he feared big cuts in used car values and called for used car valuations firms, including CAP HPI and Glass’s, to support the industry.
He said: ‘Take my business for instance. If I’m holding around £30m worth of stock – and big dealer groups are – which is money that I’ve been lent by the banks, if I’ve got that much stock and they reduce the pricing by five per cent, that will knock £1.5m off my stock value.
‘I haven’t got that, and I don’t think the banks are going to lend me any more, and I’ll end up in debtors’ prison. It won’t only be me, there will be plenty of dealers who listen to this and agree with me.
‘We need a very gentle way into this because I simply can’t have that amount of money knocked off my stock value. My business will collapse, it’s as simple as that.
‘That means there will be over 100 people out of work immediately because a guide comes out and dictates what the motor trade should be doing.’
Mike joined calls for other dealers and the industry as a whole not to distress sell cars when they get back to work as it could cause the market to tumble.
He said: ‘I think we’ll get out of this if we all think about how used cars are priced correctly.
‘I think there will be people looking for cars – look at that first before you start selling tenners for fivers. Dealers, we’re a hardy bunch, and we’re like a big family. The dealer network in this country, we are kin.
‘I do believe we can deal our way out of this. We are dealers, it’s what we’re good at. Someone gives us a bunch of tenners, we don’t sell it for a bunch of fivers, we sell them for a bunch of twenties.
‘That’s what we do. Let’s deal our way out of this in a positive way. As long as we’re supported correctly by Cap, Glass’s, the auction houses, I think we can come out of this in a good way.’
May 9 Investigation: Is now a good time to buy a used car and what will happen to used car prices? Everything we know so far on used cars
You can watch the full Car Dealer Live interview with Mike Brewer here.
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