AM spoke to industry experts to find out if some of the motor retail industry’s long-held beliefs still apply today.
The average UK car dealer produced a marginal profit of £600 per site in April, a significant drop from the prior year’s profit of £8,000.
Research into pre-registration activity has revealed a 5% increase in 17/17 plate volumes on 16/16 plate volumes in May, according to Cap HPI.
Motorpoint has imported 100 pre-registered Volkswagen Golfs in a bid to allow its customers beat the incoming VED road tax changes.
Carwow has revealed that pre-registered cars can cost customers an extra £1,500 when compared to the brand new equivalent with the results of recent research.
Current volumes of pre-registration in the city car sector are far lower than at the same point in 2015.
Nearly new volumes “are of significant concern”, says Cap HPI, and likely to cause downward pressure on prices.
Since March Peugeot has stopped encouraging its dealers to pre-register cars as one of its strategies to maximise residual values.
A survey carried out by Cap HPI has revealed that one-in-four dealers expects volumes of pre-registered vehicles to exceed 21% of total new sales in September.
The coming weeks will be a frantic scrabble to shift metal to the customer in the most efficient way possible, to meet both profit targets and volume commitments given to the manufacturers earlier in the year.
Accountancy group UHY Hacker Young has blamed pressure from manufacturers for a 46% increase in car dealer stock over the last five years.
The level of pre-registration increased 46% in 16/16 plate volumes during June.
The issue of increasing pre-registrations is very real as dealers seek to drive through volumes tol release the bonuses that are a vital part of profitability.
Strong demand drove up used values by an average of 0.4% in February.
Manufacturers are being forced to introduce deposit contributions on nearly new cars to create differentiation with the monthly rates available on subsidised brand new vehicles.
Peter Watts, Motors.co.uk director of dealer insight, is offering tips for retailers over Winter season.
NAMA has seen a 20% drop in volumes of vehicles under two years old in October, showing dealers are effectively managing near-new stock.
The new car market is still on track for a record year, despite a sales dip of 1.1% in October, according to CAP.
The growing use of pre-registrations has yet to feed any significant impact into auction values or volumes, according to the NAMA.
The used car market needs transparency of pre-registrations which risk hurting values, Derren Martin of CAP Black Book, will tell the AM Used Car Conference.
