Dealers offer cash for used cars to boost custom

speedfreak

Interesting article in the IT today. Is this a case of more silly talk from the car industry? I would have thought dealers had enough used stock on the forecourts. If they were to take in used cars why not as trade ins against a new or other used car? Also interesting is that X5 and RR are only 4x4s with any kind of interest.... Yea I wouldn't mind one either if it was 1/10th of new price!

"DESPITE THE downturn, some dealers are advertising cash deals to purchase used cars from customers. Dealers expect that a stronger demand for used cars in the coming months will offset the fall in sales and help create much-needed custom.

Several dealers are now offering cash deals and one, Dermot Wallace, who runs a long-established south Dublin dealership, says he has had a strong customer response.

“The used car market is going to come back and get better,” says Wallace. “There are a lot of people who want to sell for various reasons: they are in financial trouble, they are stressed or they have lost their jobs. For us there are always cars that we are willing to take in and there will soon be a shortage of good used cars because new cars simply aren’t selling.

“In the last 75 to 80 enquiries, we have had people enquiring about moving down, sideways – nothing is off limits. There are people trying to get out of expensive cars for €100,000-plus to ordinary cars for €3,000; two- and three-car families are reducing to one car.”

Wallace says the demand for large SUVs has almost gone and that, apart from the likes of Range Rovers and BMW X5s, there is no demand for the rest. “All of the bolt-on 4x4s, as I call them – the likes of Ssangyongs for example – are finished.

“People often want to sell their cars but they also want to get into something else. Many of the people we’re dealing with bought cars when everyone was going mad. I don’t think that market will ever come back or should be allowed to come back.

“Importers and manufacturers are going to have to carry the new stock and the demonstrators. The block exemption rules [forcing dealers to expand and renovate their premises] should have never applied to a country of our size. They lost the run of themselves. If you asked the main dealers whether they would do what they had to do again, they would say no.”

Gregor Samsa

Interesting indeed.

But what kind of prices are they paying for the cars? Sounds like they're going after desperate sellers - so maybe the strategy is get the cars for a knockdown price now, and hold on to them for when the market picks up a bit.

alias no.9

phutyle wrote: »

Interesting indeed.

But what kind of prices are they paying for the cars? Sounds like they're going after desperate sellers - so maybe the strategy is get the cars for a knockdown price now, and hold on to them for when the market picks up a bit.

The market picking up will be defined by volumes of transactions not prices. He'll need to be buying cars at significant discounts to break even but even at that, if people are prepared to let them go cheaply to him, they'll sell them for similar in a private sale. It's a viscious cycle and the best that can be hoped for at the end of it will be price stability. With the exception of very few models, cars do not increase in value.

lifer_sean

alias no.9 wrote: »

cars do not increase in value.

The prices that dealers will pay for used stock can go up. Look at auction prices in UK from Jan to Feb of this year - prices up across the board by between 10-30%.

Supplies of used cars have been drying up for months and the prices in Merlin etc have firmed up. Dealers that were selling new cars are now looking at buying in used cars that they can sell so that they can make some profit. Ths means that there are more buyers than ever at the auctions, which will definitely drive prices up as they bid against each other.

This will have less of an impact on retail prices. For the cheapest ones on Carzone etc, as these are sold there will be few low price ones taking their place ... there is no way dealers can buy in new stock cheap enough to sell at the bottom end.

For dealers with mad high prices it will be business as usual, ie no sales, as customers continue to shop around.

fm

with sterling getting stronger too,uk imports are getting more expensive so irl prices should go up in line with them

niceirishfella

A lot of "talking it up" going on there.
There always has been stuff shifting sub 7k as stated here loads of time. Nothing new in what he's saying.

speedfreak

They are paying cash for decent cars that people are desperate to get rid of for financial reasons. I'm sure they aren't paying top dollar and are v particular about what they take back. No V6 petrol Touaregs I'm sure!