Yes mate remember the 90s well, weve sold cars and vans for decade or more and ive never seen such quite times ,our stock is normally sold over and over in one month .
Weve done well on ebay last year ,this year its dead .
I walked around Kingston
Same as at classic car shows ,the traders can earn more money on-line than by buying a pitch !
Dont have the answers apart from looking into other areas of the trade
Even vans are dead and they normally hold their own!!
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June was a good month for new car sales - according to SMMT. Sales up on last year apparently.
I 'play about' at a bit of trading and have sold 5 cars since I came back from China after Easter. 2x BMW E39, 2x C-class and 1x Nissan 200SX. All were good motors and snapped up quickly at good prices. I suspect 3+ YO bread and butter motors are not selling so well, there seem to be a lot about and auction prices very low. Older BMW prices (e.g. E39, E36) seem to be nose diving - glad I got shot of mine quickly.
OTOH I do think hard times are coming. Interest rates going up, lot of people borrowed out and house prices looking a bit silly IMHO. So much of UK economy is now linked to retaling that I think once we go into a downturn we'll see 'positive feedback' effect and things will get bad very quickly. Too much is on tick and I think it has to end in tears sooner or later.
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The fact that anyone can go to a car auction and buy a car and then offer it for re-sale without any/very low overheads is a bigger problem than ever before for small independants who like any other business are drowning under lots of expensive rules/tax and bureaucracy.
Reconditioning and repair costs are very much more complex and expensive on a lot of modern cars,i found myself in the position where i would not retail any Fiats,Renaults,Rovers,Peugeot,or Citroen because once they were outside warranty the potential to lose money was too high and the margins too low.
I'm glad i'm out of it and can now just sell the odd Honda or Toyota to 'keep my hand in'.
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Not sure what area the gents above are located but in my area (east Kent) there two large and long-established independents where I remember looking at cars on Xmas eve last year and around 25-30% of the cars are still on the forecourt now. Prices at both are often the same or more expensive than main dealers. They do not appear to have a policy of reducing stock prices because the cars languish on their forecourt for month after month at these clearly unrealistic levels. I cannot speak for other areas but downturn around here points towards greed and stubborness more than anything else. What happened to the 3 month turnaround that we often read about where un-sold cars are taken off to auction after 3 months if not sold (or even earlier)?
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You are talking about stock control,its not rocket science,but too many sales managers/used car controllers have not got a clue how it works and just ignore the facts hoping that a victim will come in and buy the car at the price marked in the screen.
Its a problem with car retailing in the UK,very few people with any skill or talent working for importers or dealerships.
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Times are a tad tough. And will get a tad tougher. As soon as you get an interest rate rise cycle, the bigger money purchases (specialy thos financed by credit in some way) go out the window. Added to that, the weather has been pure carp, and people dont buy stuff when its raining.
we are looking at probably 1 or 2 rate rises more rate rises. They will hold for a while, and when people get used to it, they will buy again. This time next year earliest I reckon. I dont think (judging by my sector of business) that we will crash hard.
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TourVanMan TM < Ex RF >
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Talking to people involved in motor finance say that the profile of applications is very much of a lower quality,in that there are very many people that are way over commited but still want to commit to a new car with ever higher payments.(keeping up with the Joneses)
As to a 'hard landing',thats all about perception,but there are too many asset classes that are just over valued at present,property and shares just for starters and there will be a 'correction' which will hurt the retail car market as financing becomes more difficult/expensive.
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It amazes me how many dealers hang onto stuck stock for ages. Personally, I reckon if it hasn't sold in 4-6 weeks it is time to get shot and try something else.
Have to say I reckon things are pretty busy at the moment. I think one of the problems is that auction prices were very high in the early part of the year with a shortage of good cars on sale so some dealers bought in at high prices and 3 months later now have cars with large stand in values they can't shift.
I think the dealers who find it difficult are those stuck with large overheads but no franchise. Buyers seem to either want cheap or all the trimmings at a franchised dealer and being in the middle ground is not easy.
I also have to agree that the days where a used car dealer could survive by cunning alone are passed by - it is a business like any other and has to be run properly. Spend some time at car auctions and you wonder whether many really have the ability to run a multi-million pound operation.
On the level of business front I suspect there are regional variations too, as always.
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It amazes me how many dealers hang onto stuck stock for ages. Personally I reckon if it hasn't sold in 4-6 weeks it is time to get shot and try something else.
My son & DiL wanted a 2nd hand mini 2 yrs ago - travelled 200 mls for a Mini dealer with much sharper prices - reason? In stock for more than 6 weeks the price came down to clear. They saved between £1200 & £1500 on their "local mini dealer prices". Bad news is that small dealer outlet is now part of a huge chain.
3 mths ago similar logic on a 2006 BMW525D - spotted one South of Manchester - £2,000+ lower than Scottish Dealers who would no budge far even sitting in front of them.
Over the phone knocked off another £750 +RFL+Full tank & delivery (600mls round trip) - Dealer in Nth England was prepared to deal as it was sitting around for nearly 3 months.
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My experience too FB. In N.W Wales, the local dealers (be they franchise, indie or back street) seem to have the 'Welsh' version of CAP/Glass's whereby prices are sigifigantly higher than in, for example, the lean mean Midlands (esp. for 'premium' brands). Part of the reason, imho, is the captiveness of the local punter - unless they're used to negotiating intially on the phone & using the internet for price research, they more or less have to accept what the locals charge. Of course it's a sliding scale - the further towards to Midlands you get the more competitive the retail price range. My plan for next sale/purchase is to sell my p/ex locally & buy distantly - perhaps a tad less convenient, but I reckon the thick end of £2-3K overall CtC would offset that.
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There has always been "cheap" areas. The east midlands, always seems to be cheaper than west midlands, east london (goodmays/romford) was always cheaper than west london (hounslow/hayes) South London, always cheaper than North London.. Bristol cheaper than Bath.
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TourVanMan TM < Ex RF >
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In ref. to your post TVM - yes, perhaps now in these interweb days the cannier punter can take advantage of the regional variations more effectively. In my 'case' , it doesn't just seem to be £100's, but £1000's difference CtC for some potential transactions. I think there must still be a big enough proportion of local punters who either don't leverage their haggle by quoting 'cheap' area prices when buying here or who are happy to trade that off for the convenience (probably a mixture of both).
One local indie used 'prestige' dealer especially comes to mind. He operates in a fairly isolated, wealthy-ish enclave with a predominantly retired English clientele locally & a good pitch on the only main road into town. His prices are to me, pure fantasy, but he seems to turn-over stock regularly - mind you, just up the road, the only local large multi-franchise operation has equally ludicrous sticker prices, so that probably colours the ambient perceptions of 'value'.
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Even in the pre tinternet days, I lived in west london, I wanted a second hand motor? I went to east london to check out the prices and buy there.
If you told a bloke selling a car in west london it was cheaper in the east his answer was always the same "dos off then and buy it there"
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TourVanMan TM < Ex RF >
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Even in the pre tinternet days, I lived in west london..
Precisely my point. The web shrinks the world, so overlay 'west Wales' & 'east midlands' on your locations.
If you told a bloke selling a car in west london it was cheaper in the east his answer was always the same "dos off then and buy it there"
Could he afford to be quite so cavalier these days though?
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Could he afford to be quite so cavalier these days though?
well it depends.
There is, near me, a small lot in Addlestone Surrey. 6 / 8 cars mostly. 6 year old, tarted up, overpriced stuff mostly. Nothing bigger or more exotic than a focus. Poor reputation. Been there for 20 years, still selling cars. I know the ground rent on this location is low, but has really good pass by rate being on a well used road with jams.
Location location location I guess.
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TourVanMan TM < Ex RF >
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Could he afford to be quite so cavalier these days though?
More than 1 answer to that.
Seller has to weigh up the buyer. Buyer has to make a profit or why do a deal?
Are more people prepared to travel to buy a car, as has been discussed previously, negotiations get weaker the more you travel because of costs. How many times do you visit a car 100's of miles away just to find out it is not as expected etc?
A good local car dealer is as good as any other local trader. If you trust him and can afford it then it may be a bettr deal?
And on another angle, why is it ok for any other trade to make a profit (its healthy) but expect motor trade to work for nothing?
Would you expect a decorator/designer/architect/solicitor/consultant/it specialist to do it for less because you have found another in another part of the country cheaper?
But you pay your money and take your choice!
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Would you expect a decorator/designer/architect/solicitor/consultant/it specialist to do it for less because you have found another in another part of the country cheaper?
Yes, if that good or service were transportable or transferable & the quote/price was viable & practicable.
And on another angle, why is it ok for any other trade to make a profit (its healthy) but expect motor trade to work for nothing?
If they didn't make a profit, they wouldn't be there (for long) , so one must assume they will only deal at or above their profit point, my aim is to make the 'above' part as small as possible! Standard business practice in other words. I compete for work, why shouldn't other businesses too?
But you pay your money and take your choice!
Eventually!
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Yes, if that good or service were transportable or transferable & the quote/price was viable & practicable
Its like looking at cars 200 miles away though? How many times do you travel to find out its not what you expected?
Many of those trips and it would be cheaper/more sensible to buy locally even if at a slightly higher premium?
As your local furniture shop may be dearer than a big swedish one 50 miles away for example, but of better quality possibly?
Price isnt (or shouldnt be) the only part of the equation!
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I recently bought a 1-yr old car from main dealer. After a test drive I simply showed him an ad of same car in AutoTrader for £500 less in another garage (not main dealer though) which is 50 miles from my home (where as main dealer was just 10 miles away). I told him that next morning I'd be going to see that car. In the early hours of next morning he called me and offered to match the price!
So, nowadays, dealers can't afford losing customers for few hundred quids. I also spoke with another dealer on matching DtD price and they also agreed to match it.
Current auto market isn't that hot now (for the weather? :)) - so most dealers are willing to negotiate.
If they didn't make a profit, they wouldn't be there (for long) , so one must assume they will only deal at or above their profit point, my aim is to make the 'above' part as small as possible!
Yes, now they operate on much lower profit margin because customers are willing to travel a lot for a cheaper deal!
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Another factor to consider this time around with reagrds to interest rate increases, is more people have fixed rate mortgages. Currently these people will not have felt the rate increases, but as their fixed term ends over the next six months, people could be in for a bit of a shock.
I.e. these rate increases have a slow burn effect compared with the 90's housing crash when people were mostly on variable rates and felt the pinch immeadiatley.
I suspect early 2008 could be a difficult time for many people and 08 plates could be had at rock bottom prices.
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My experience too FB. In N.W Wales the local dealers (be they franchise indie or back street) seem to have the 'Welsh' version of CAP/Glass's whereby prices are sigifigantly higher
Agreed, I always look to the good old Midlands for cars, although even in parts of tyhe Thames Valley there are some reasonable deals to be done given a bit of hard haggling.
However in my native SW Wales used car prices are phenomenal and quite often for poor quality stock. I guess they rely on punters who can't be bothered to travel a bit.
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Price isnt (or shouldnt be) the only part of the equation!
But it has become the first question using which consumers "filter" where to go and where not!
Let BoE play their cards more often and we'll see more & more price sensitive market.
Did you notice recently how many people are downgrading their cars while changing - like going for smaller engine and doing aways with sunroofs etc.
It's all down to money at the end.
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>>"June was a good month for new car sales - according to SMMT. Sales up on last year apparently."
When we Recently fell out with our local Renault dealer and I spoke with the sales manger and informed him thay sadly we will never be buying another car from them because of the brand, he was quite philosophical - he said "my salesman will miss his £500 - Renault won't as they will just pre-reg another car.
I've sold 3 cars on Ebay in the last 18 months all have gone for well above book and all have gone for their "Buy it Now" I think the trick regardless market conditions - a well presented car with full history years MOT and Tax will always attract buyers.
I worked for a oil engineering company for a year and they famously grew 20% during one of the worst recession ie oil at $20 a barrel (not that long ago) - reason was unlike the competition the sales team worked hard, the factory worked harder and the supply team worked harder - despite massive over capacity the customer chose us based on Product and Service - we never discounted. We came through two terrible years with less competion and loyal customers!!
Paul
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