Dealers troubled by agency model impact on used car supply

Concern is growing that the agency model could further restrict the supply of used cars should manufacturers start extending their control, according to the latest monthly analysis from Startline’s Used Car Tracker.

The model is a new direct-to-consumer system which is seeing carmakers transition away from the traditional method of selling cars through franchised dealerships.  

The Startline Used Car Tracker surveyed 51 dealers about market prospects and the challenges they face in the used car market.

The agency model was mentioned by 27% of dealers - the highest monthly figure recorded since this factor was added to the research in January.

Paul Burgess, CEO at Startline Motor Finance, said: “The growing worry over the agency model is interesting because, at first glance, it doesn’t directly affect used car dealers. However, there is perhaps a growing level of concern that it could impact on already tight used car supply, with manufacturers using their new agreements to attempt to control vehicles through their second and third lives.”

“While dealers are not worried about stock availability to the same extent seen a few months ago,” he added, “it is clearly still the foremost issue occupying them on a day to day basis. Supply of used vehicles is a problem that is not going away anytime soon, even if there are signs that the situation is easing.”

To hear more about the impact of agency models on franchised dealers, make sure you come along to Automotive Management Live on November 9.

The changeover to electric vehicles (EVs) is also an increasing worry, mentioned by 61% of dealers, its highest figure since January. However, stock availability remains the biggest overall concern at 67%, although was as high as 89% as recently as May.

The availability of finance was also cited by 51% of dealers, its peak for this year.

Burgess said: “The cost of living crisis has no doubt affected motor finance availability, with some lenders tightening their criteria as individual personal finances are placed under increasing pressure. This is an understandable response to current economic conditions but it does underline the need for dealers to construct a lending panel that meets a variety of customer needs and provides a variety of risk appetites."