Used Market Place Trade Talk
The markets remained much the same as last month, with commercial vehicles selling really well, but the car market remains a struggle.
The retail demand has not returned this month to the forecourts, with half term being an extremely quiet trading period. Therefore trade at auctions has been, consequentially very quiet too.
And there is no shortage of stock either, with fleets continuing to send volumes back to market.
There is a glimmer of hope though, in that there could be a spike in retail demand during December, ahead of Christmas. This will hopefully create some better wholesale trading conditions, with some of the stock moving.
We started using SMA’s Livingston site during the summer months, for car stock. This has proved very beneficial, with most stock selling during its first outing.
Alistair Brown, the Branch Manager has been very active in marketing the stock too, sending out flyers seen below to all known Scottish and Irish buyers, even laying on transport to collect and return buyers to and from Edinburgh Airport!
We will of course continue to monitor progress at this site.
There has also been much talk within the trade recently of some movement at SMA Vehicle Remarketing, in terms of industry positioning. To allay our fears as a business, SMA have provided a sizeable bank guarantee this month, covering any sales exposure. In addition SMA also pay sold proceeds within 3 working days, which is way ahead of the rest of the industry, thus we believe we have covered any financial risks associated with using SMA.
The LCV market, in complete contrast remains on fire! Clearly due to a lack of stock, any sales that we attend at the moment, wherever they are in the country, are extremely good with all stock selling first time.
We anticipate this strong market continuing right through to Christmas and beyond, as there are no major volume returns expected before the middle of next year. Thus with the exception of the normal Christmas close down, the LCV markets will remain very strong indeed.
There are a few areas of the market that are quite poor though. This Ford Transit minibus, seen at the sale at Fleet Auction group this month, failed to attract any real interest.
The reason was simple, the vehicle was valued too highly in Book and so, without auction attendance, the vendor placed a high reserve against the expected Book value of £15800. As a trader pointed out to me at the sale, a new one could be bought from any Ford dealer at £19,995 currently, and with offers on servicing. By the time this model had sold for £15,800, been serviced and MOT tested, the retail price would need to be £17,995, just £2,000 shy of the new price.
Simply, CAP has it wrong. Had it been priced sensibly at £13,500, the bus would have sold easily.
And that is an issue that affects both cars and vans this month, crazy Book pricing. Nearly new product in both sectors is really struggling, because their trade prices are so close to new deals.
Whilst this situation remains, nearly new product will not sell, because there are also so few traders left in this sector of the market now. Most traders would prefer to buy 2 older vehicles for the price of 1 nearly new one, effectively doubling their profit margins in the process.