G3 Remarketing – Could auctions unlock greater dealer margins?

More than two million used cars exchanged hands in quarter one of 2018 – the third highest level on record.

Yet, dealers are experiencing squeezed margins, due to inflated stock levels – a consequence of a market overloaded with pre-registered vehicles, and a shift towards PCP purchases – which means that people are changing their cars more often.

It is therefore more important than ever for dealers to stock the right vehicles, at the right price, to ensure their forecourt attracts potential customers.

Choosing a suitable channel to source vehicles is key and auctions pose an attractive option. Online sales now complement physical offerings, meaning dealers can rigorously research the national marketplace and source stock without even leaving their base. The fuel and time savings of this approach are vast – especially because if a lot is lost to a rival bidder, there has been no wasted trip.

Some buyers still prefer the in-hall experience, of course, so auction houses offering digital sales have had to step up to address the perceived obstacle of not being able to see, touch and hear vehicles in person. The result, pleasingly, is a heightened inspection and grading process.

Cars should now be appraised by National Association of Motor Auction (NAMA) vehicle examiners, and where possible, high quality, media-rich inspection reports ought to be provided. That way, dealers can trust that their purchases will be delivered exactly how the description and damage report states – ultimately determining whether a car has potential ‘profit under the bonnet’.

The motor industry is undeniably a complex world, and the maximisation of margins isn’t always easy. But a car auction can support dealers with their plight, without compromising the commitment also made to the vendor.


Written by Gareth Jones, G3 Remarketing – https://www.g3remarketing.co.uk/

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