For dealers, 2012 will be a year to focus on
used cars, according to the latest survey by global credit
information services group Experian.

The survey of 128 UK dealerships in December
2011 largely confirmed
the findings of vehicle auctioneers Manheim Remarketing,
published earlier this month, with the conclusion that 62% of
dealerships asked expect used car business to grow this year.

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The challenges identified by dealers polled
included the profitable sale of used vehicles (23%), the short
supply of quality vehicles (22%), and the reaching of suitable
customers (17%).

Although a minority of dealers, 38%, expected
to see an increase in new car sales, there was a stronger sense of
loyalty among new car buyers with an estimated 70% returning to the
dealer for servicing or repairs, compared to 14% of used car
buyers.

Prominence of provenance

Given
recent calls from HPI and the Office of Fair Trading for
greater awareness of the potential of buying cars with outstanding
finance, the poll also found an increased willingness among dealers
to perform vehicle provenance checks in the coming year, also
reducing the possibility of insolvencies.

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72% of dealers polled said that the importance
of vehicle provenance checks would rise in 2012 as tough times put
a premium on minimising any stock risks.

With the used car market typically considering
quality stock to be three-to-five-year-old vehicles, the market is
beginning to absorb motors purchased during the nexus of the
economic crisis.

As such, the survey found 70% of dealers
expected to see a higher proportion of vehicles offered to them
with outstanding finance.

richard.brown@vrlfinancialnews.com