Motor trade to prepare for clocking crisis
The motor trade could be heading towards a clocking crisis, as the number of Personal Contract Purchase (PCP) agreements reaches an all-time high.
That’s the warning from big data business Cazana.com at a time when official figures show one in 16 used cars on the road has clocked mileage, a 25% increase in cars from 2014 to 2016 according to NFDA (National Franchised Dealers Association). Cazana is forecasting this trend to continue, with the number of new vehicles purchased through PCP reaching in excess of 82% last year.
Rupert Pontin, director of Valuations at Cazana, expressed concern that a significant number of new vehicles purchased through PCP are returning to the used car market with incorrect mileage figures, as consumers turn to mileage correction companies to ensure they do not exceed the terms of their finance agreements. Pontin also believes that clocking is no longer being associated with fraudulent car dealers and sellers, but with supposedly finance-savvy consumers.
He commented, ‘Throughout the past ten years, there have been calls for the trade to clean up its act when it comes to clocking, and these words have been heeded. However, what we are starting to see is more consumers deliberately clocking their cars to ensure they do not go over the terms of their PCP agreements. As finance becomes the most common option for vehicle purchasing, we are seeing an increase in clocked vehicles returning to the used car market.
‘Dealers do not always have the required equipment or experience to thoroughly check PCP vehicles for clocking during the de-fleeting process, and auction houses are also in a similar position as they act as remarketing agents. The trade needs to be extra vigilant and continue to keep an eye out for evidence of clocking.
‘Working with specialist platforms such as Cazana can ensure that all the relevant vehicle checks have been made prior to sale, and that the best possible price based on real-time residual values is always being received.’