The used car market is set to become challenging in 2019 but there are opportunities for dealers to sustain the bottom line, said Karl Werner, deputy chief executive officer of MotoNovo Finance.
Concerns in the trade such as margins becoming squeezed as a result of shortages of quality stock, high stock prices, flattening retail prices, and competition fuelled by the rise in digital channels are all going to provide challenging trading conditions.
As well as the competitive issues, Werner encouraged dealers to be prepared for the continuing impact of broader macro-economic factors affecting the market, including emissions regulations continuing to effect product supply, the emergence of Ultra Low Emission Zones (ULEZs) impacting older used stock and residual value setting, the outcome of the FCA review of motor finance, the continuing impact of Brexit on consumer sentiment and the economy, and increasing competition for car sales and customer data.
Werner said: “Looking at current market conditions; the continuing emergence of market disruptors and what now looks set to be ongoing political jousting, dealers should prepare themselves for what looks set to be an even more challenging market. In challenges there are threats – but also opportunities – and we do believe dealers can take advantage of these in the year ahead.”
Results released by findandfundmycar.com, the aggregation platform of MotoNovo Finance, have shown a 13.5% uplift in finance volumes in 2018 compared to the previous year, as the platform delivered a total of 55,000 finance proposals for its supporting dealers.
A year on from the launch of the website, over 2,600 dealers are now offering more than 137,000 cars on the platform and the site has expanded to include LCVs and bikes.
Werner continued: “It’s long been the view of the team here at MotoNovo Finance that dealer finance can play a hugely significant role in used car sales. This is why our findandfundmycar.com proposition is so unique; it is the only major car sales aggregator that does not offer or advertise finance that competes with the dealer, instead it promotes dealer finance itself.”