Used Market Place Trade Talk
The August markets were extremely quiet, as predicted. As is usual at this time of year, the auction markets are very quiet, with most traders and dealers on holiday. Thus any sales at market tend to be less expensive than they would be in September; this makes our rostrum attendance even more important to ensure the right prices are achieved.
Some Sale Sites Remain ‘on song’!
That said, there were a few ‘hotspots’ this month, where prices not only held well but actually improved! At a sale in East Anglian Motor Auctions during the month, our stock sold very well indeed, and in some cases making over Book value!
It was a similar story at South Western Vehicle Auctions where, again this month we had a very successful sale.
Even at Shoreham, where the auction hall is normally buzzing and packed, the absence of buyers was stark, seen below. But even here, prices held up well, with just a few on line buyers helping to sell product. But rostrum attendance was essential here.
The reason for the success at both sites is quite simple; because they are local sites, they attract both local traders and private buyers, who are still out and about. It is quite a different story at the main auction centres, where stock is in abundance and buyers are thin on the ground.
This will produce some pricing difficulties, as we head into September.
For cars, CAP is simply too high, with most models now underperforming CAP Clean by at least £300 and, in some cases up to a £1,000.
Even the, ever popular sports SUV class, such as the Kia Sportage seen below, is now selling for only CAP Average, not Clean.
The only exceptions to this rule are the most desirable stock, such as an S Line Multitronic Audi Avant, or other similar fully loaded SUV’s. These will sell for clean money, if in the right colour and free of damage.
New 65 Plates
With September now upon us, most franchised dealers are concentrating on getting the new ’65 plate’ stock sold, so that new owners can show off their new car on 1st September. This produces a couple of interesting dimensions to the used markets; firstly the extra influx of thousands of part exchange cars into an already saturated market will have further negative impact on pricing.
Secondly, with Manufacturers all eager to increase their market share, it is providing the markets with more and more 3 year old plus stock, leaving fleet vehicles of a similar age to flounder amongst a mass of stock.
Our answer to this is to avoid the major auction centres and, instead focus our attention on the remoter Independent auction sites, such as East Anglian and South Western auctions. In addition, we are using more direct electronic sales through Copart Limited, and ‘overseas’ in Northern Ireland, where the market is flourishing.
Market Guide Pricing
But the pricing elements of the equation will need to be addressed by the market guides. We have known for many months that prices have escalated over the last 4 years, due to a lack of stock. With much more stock around now prices will have to firm up and, in most cases reduce, because of the choice around. Quite how the guides will do that over the coming months remains to be seen.
New Model Pricing
VW are now well underway with taking orders for their newly introduced Caddy and T6 models. Rumour has it that they are struggling to get the new models into fleets in any volume, because of volume constraints and, potentially, pricing.
One issue is, of course the very strong competition. The new T6 is up against a revised Vivaro/Trafic model and the Transit Custom. Both models also come in ‘lifestyle’ variants and are much cheaper than the VW equivalents. That said, VW used prices will always command more than the Ford and Vauxhall products at sale time, but the real question is how much more. Needless to say, whole life costing models have to be thought through very carefully indeed, especially for the more humble workhorse versions of the T6 and Caddy.
It is a similar story with the Vauxhall Combo, with the Fiat Doblo version now appearing in large numbers at market. As a consequence their prices are sliding considerably and, in many cases below that of the equivalent Doblo. Condition is of course the major influencing factor.
New Combo, which is due to be announced for sale in 2018 and, interestingly, Vauxhall have found a new bed partner. The new van will be a clone of PSA’s new Berlingo/Partner variant, so it will be very interesting indeed to see where pricing is pitched with this new van.
In general terms we expect to see a return to normal trading in September, from the second week onwards. That said, prices will be under pressure because of the large volumes of stock at market, with more to come during the rest of the month and into October.
Thus damaged stock will be treated very harshly by the trade, for both car and commercial, therefore attendance on the rostrum will be essential to derive the best values, in what we expect to be a busy market place.