Older cars create problems for 86% of dealers

Older vehicles are creating problems with service history, preparation and breakdowns, as 86% of dealers express issues.

Data from Startline shows that 58% of dealers are selling older cars than they were three years ago, as a result of stock shortages and higher values.

As a result, 32% say that vehicle history has become more important, 24% that more preparation is needed for sale, 13% that breakdowns or warranty claims are more common and 11% that customers require more convincing to buy.

Paul Burgess, CEO at Startline Motor Finance, said: “We can see from our own lending profiles that the average used car purchase is getting older and this is something that is affecting everyone from franchise dealer groups to small independents.

“The situation means that dealers are experiencing issues. Some of these are around the need to reassure customers that an older vehicle remains a good buy – concentrating on presenting a well prepared vehicle with a sound service history. However, more active problems are arising, such as high levels of breakdowns and even more cars being returned.”

August’s Startline Tracker provides a comprehensive picture of how dealers currently view the used car market, with some slight improvements in how they perceive its prospects after marked falls in recent months.  Twelve percent said they are more optimistic than in July, while there has been a corresponding fall, to 32%, in those who are more pessimistic.

Reasons cited by those who are optimistic include that stock supply is strengthening – mentioned by 100% of respondents – and that motor finance availability is improving (67%). Those who are pessimistic say that market and prices are weakening (45%) and that stock supply is poorer (45%).

Burgess added: “It’s been pretty clear from the Tracker in recent months that different dealers are seeing quite different trading conditions. For example, some really believe that stock supply is improving but others really don’t. However, we believe the market is at a point where it has gone through a period of slight readjustment and is now relatively stable and buoyant.

“How things develop over the next few months is difficult to say. The cost of living crisis is likely to get worse but stock supply is unlikely to change substantially, so we believe some kind of equilibrium that will see the market maintaining similar conditions to those we are seeing at present is most likely in the medium term.”

Delivering a mid-July market update to AM recently, Cap HPI director of valuations Derren Martin said there were no signs of prices “crashing” in the used car sector, despite the effects of soaring inflation.

Martin told AM that a “stable” market had seen used car values at three years and 60,000 miles decline by an average of 0.1% month-to-date, with a 1.3% decline at 10 years.

He had previously told AM that the sectors stock shortages were preventing what could otherwise be a “bloodbath” of falling prices for car retailers.

The Land Rover Defender was named the most desireable used car, in August, by Aston Barclay. The auction group found that premium-brand SUVs are the most in-demand models at auction.