Used car market to polarise
A leading UK network of smart vehicle repairers believes the used car market will split into two distinct groups – budget vehicles and top end cars.
Speaking in response to the record number of new vehicle registrations during March, are recorded by the Society of Motor Manufacturers and Traders (SMMT), Revive! managing director Mark Llewellyn said, ‘For me one of the stand out facts arising from the SMMT March report was the amount of vehicles that were purchased on finance – over 80%.
‘People who meet the lending criteria for low cost dealership finance or loans from mainstream lenders like supermarkets and banks can take advantage of the great deals available on new vehicles but those who don’t want to finance or have poor credit scores will still look to buy used cars and self finance the purchase.
‘Undoubtedly there will be far more cars flooding on to the used market that have been either part exchanged or sold privately and the challenge will be how to move these on.
‘I can see a two tier market emerging – cheap, high mileage cars that will appeal to people with low budgets – and the high quality used cars which people will still want to buy at the keenest price but look for the best example they can find within the marque.
‘To maintain profit margins dealerships need to get the balance right between how much they spend on used car prep and the potential sale price of the vehicle. Keeping vehicles moving is the key – so for cars in the first budget tier it makes sense to do nothing to the car and move it on quickly through the trade.
‘For the second tier there will be a great deal of competition to tempt buyers looking for better quality used cars. Spending a small amount on cosmetic smart repair to improve paintwork and alloy wheels to present a vehicle in its best light could make all the difference between selling a car and seeing it lingering on the forecourt.’