Some 85% of dealers view the time taken to complete reconditioning work is the biggest delay to getting a vehicle on sale, according to Manheim’s latest dealer sentiment survey.

The results come at a time when high demand for stock is leading to strong competition in the wholesale market. As a result, some dealers are choosing to upgrade lower condition vehicles rather than pay top-price for ready-to-retail stock.

Philip Nothard, customer insight and strategy director for Manheim, said: “We know that margins are under pressure, with almost half (48%) of the dealers we surveyed reporting a year-on-year margin decline.

“These pressures, coupled with a competitive wholesale market, mean that retailers are managing costs extremely carefully. One strategy is to buy lower grade vehicles, or keep hold of part-exchange stock and recondition it before putting it on sale.”

The survey also found that it takes an average of 3-4 days to list a newly-sourced vehicle for 42% of dealers, while just under a quarter reported an average of 5-6 days.

Nothard continued: “Reconditioning can reduce the initial outlay for a dealer, but there are hidden costs in the potential impact on time to sell.”

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Separate research from cap hpi suggests that a standard used family hatchback like a Ford Focus can depreciate by an average of £7 per day – a hidden cost of £28 per car if it takes an average of four days to list a vehicle.

“It’s worth being aware of this hidden cost because there are ways to mitigate it” said Nothard. “It goes without saying that a reliable reconditioning partner is a must for dealers that don’t have in-house reconditioning facilities.

“The key to margin gain for dealers is to be fully aware of the impact that longer preparation times can have, so they can take steps to reduce the impact on ROI wherever possible.”