Used car stock ‘crisis’
July 30th, 2009 by Richard Aucock
CAR dealers are being forced to stock older used cars, due to a severe shortage of nearly-new models.
Glass’s says this has led to price increases of up to 25 percent.
Since the beginning of summer, there has been a severe shortage of nearly-new stock, particularly short-term rentals and dealer demonstrators.
There is no solution on the horizon, either; editor Adrian Rushmore says the situation could remain dire until the middle of 2010.
‘Even if manufacturers decide to resume supply to daily rental firms in 2010, the terms of the agreement are likely to stipulate an extended ‘tour of duty’ of at least 12 months.’
This, he says, ‘will simply prolong the period of used car drought.’
Car dealers will thus have to fight just to ensure stock levels do not crash even further.
It’s all been caused by the grim new car market. Fewer cars are being registered – in particular, the short-term rentals that feed the nearly-new market.
This is having a knock-on effect of rising prices in the older used car market, too.
‘Dealers are turning to older vehicles as the only means of maintaining a suitable level of stock.
‘The severe reduction in new car sales has generated fewer part-exchanges, and many franchised dealers have expressed more of an interest in purchasing cars from general auction sales than at any time in the past.’
And although this is pushing up prices, the trade is concerned that car buyers simply won’t pay the necessary retail prices.
‘In order to maintain turnover, many dealers are now accepting slightly shorter margins to ensure ongoing business.’
In short, the used car market is facing a huge upheaval – so, be sure to get in on the debate and let us know your take on things!
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