The Used Car Market has its Hazard Warning Lights On….
The car industry as a whole is taking a battering on several different sides.
Major car manufacturers are cutting jobs in the UK as production slows and some are talking about pulling out of the UK altogether. Sales of diesel cars, once seen as economic choices, have fallen out of favour and sales of electric and hybrid cars have fallen, due in part to the withdrawal of government subsidies towards the purchase price.
In the meantime, there has been considerable criticism in the press of customers being tied in to long term finance packages that may not have been right for them. In addition, both domestic and commercial customers are either putting off purchases of new cars whilst everyone waits to see what Brexit looks like and have become very prudent when it comes to what types of car they actually buy next. The more expensive luxury brands may not hold the same aspirational appeal as they once did.
What About the Used Car Market?
Whilst the national press coverage focuses on the bigger issues affecting car manufacturing and the statistics focus on the downward trend for new cars sales, we have had several enquiries from used car sales businesses. This sector is also feeling the effect of the slow down and is starting to experience financial pressure on a number of different fronts
The used car market is reliant on a steady flow of vehicles being passed down, either as trade in’s on new car sale or vehicles coming available at the end of both private and business leases. If these sectors are starting to slow down, then stock becomes more difficult (and perhaps more expensive) to obtain.
Combine that with customers who have become very cautious and wary for a variety of reasons and may be putting off the decision to buy. Anecdotal evidence from those we have spoken to suggests customers are downsizing to more economic used family cars and shying away from the more expensive used brands which is a further challenge for the used car dealers.
This means used car dealers risk being squeezed from both sides and face some challenging times ahead. It looks like it will be some time yet before the market settles and confidence returns so these challenges may continue for quite a while.
We Can Help
If you have clients in this sector who may be starting to feel the pinch, an early conversation with professional advisors might be necessary. Please call us in complete confidence for a no-obligation conversation on 0121 200 2962.