Car dealers have been finding it increasingly difficult to find new stock in recent years. In fact, 81% of dealers reported difficulties with re-stocking their cars last year. This has meant that drivers have less choice when it comes to purchasing a second-hand car.
There have been fewer part exchange deals taking place recently, which has led to fewer cars stocked in used car dealerships. In addition to this, we have also seen fewer new cars being sold over the past year as financial uncertainty takes its toll on the car market.
Dealers are sending fewer cars to auction and are keeping them for retail stock, which has meant an increase in competition. This has meant that drivers have less choice when it comes to purchasing a second-hand car. With reduced supply of two to three year lease cars in the market, prices are being pushed up further.
Brexit is having a big impact on the second-hand car market and the new car market. Companies in the UK are concerned it might be harder to source cars from Europe in the future. Fears are that instability in the market will also raise inflation. However, this could have a knock-on effect which could lead to growth in the second-hand car market.
Short stock can mean an increase in prices, however, customers have not been willing to pay more, so the difference in supply has meant that car companies have been having to absorb the costs. This has taken its toll on margins and so dealers are feeling the pinch.
If interest rates rise, this will mean more costly financing deals. This will put people off buying a new car and could eat into the profit margins of dealers further. Dealers will also need to consider saving money on motor trade insurance. If anyone in the trade is left wondering what is motor trade insurance, now is the time to discover more. It is also easy to find advice online from the DVLA. Companies in the UK are concerned it might be harder to source cars from Europe in the future. Fears are that instability in the market will also raise inflation.
One area of growth is online trading, as more people look to the internet to buy their next car. Both new and used cars are sold online and this has led to an interest in video tours and virtual showrooms that let people see cars up close. Buyers now want to be able to see a video of the car before going to the showroom.