Dealers have continued to focus on selling add-on products in
May, and especially finance products, as well as GAP insurance, and
paintwork protection packages, VIPDATA has said.
Commenting on the state of the UK car market during the month,
the valuations subsidiary of vehicle data provider CDL added that
this is “especially important in times when the profit margin in
the car is ever dwindling”.
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It stated that the emphasis at the point of sale is increasingly
on finance and insurance products, instead of the car itself.
Elsewhere in the market, sales rates of used cars slowed, while
late low mileage cars remain in demand, due to long lead times and
retail consumers’ impatience.
However, a large deposit is often required, meaning many buyers
are unable to obtain finance.
VIPDATA attributed this to the idea that most lending
organisations are using single source trade values, which may not
accurately reflect the market. This was described as “unhealthy”
and it was suggested that an alternative source could help to
eradicate errors and create new opportunities.
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By GlobalDataRetail has also suffered in May, the company said, and
especially in the prestige sector. A number of dealers were said to
have reported low forecourt footfall and a fall in telephone
enquiries.
This has led to price reductions and has in turn meant fewer
part exchange vehicles are coming to auction.
Auction halls were described as stagnant at the moment, in terms
of stock and activity, as large amounts of former fleet and
retailer stock on sale may be in need of paintwork or other repair
work. Service history may also be lacking or incorrect.
These factors have driven values down and VIPDATA itself is to
drop its values for this month by up to 5%.
Meanwhile, models such as the Audi Q5 and Q7 may be sourced more
quickly. These are either dealer showroom cars due for replacement,
or orders where the customer has cancelled.
Troubled Saab has also started to rebuild trust among retail
buyers and fleet companies, offering cleaner, powerful diesel
engines, VIPDATA said, but their problems will not be over unless
their funding issues are resolved.
