So You’ve Got A Porsche To Sell!,,,,, Get Over Yourself!,,,,,,,,,,,,, 

A provocative title but an important attention grabber for my latest report on the specialist high performance used car market; following on from the recent article (link below) and coming as we all enjoy the Easter break. 

Wave Goodbye To Top Prices For Specialist And High Performance Cars!,,,,,,, 

Now I will immediately add the caveat that the market is becoming the most difficult to read and navigate since the one experienced leading up to and during the financial crisis; 2007 – 2009. 

By the very nature of what I do, I speak to a lot of people trying to sell their specialist high performance car, and with the peak of the market for prices now long gone, most owners looking to sell their car are now in danger of missing the market and the last opportunity to secure sensible offers. Before the ever increasing and inevitable lack of liquidity within the market leaves all but the finest examples struggling to secure offers; and with this in mind I thought I would leave you all with a market synopsis to consider over your Easter break. 

As much as the market is too difficult to read and assess for owners, it will result in most owners failing to secure sensible offers, and this will no doubt be due to two fatal flaws in their decision making process; greed and naivety. Whilst saying this though, I also appreciate that it is impossible for busy successful professionals to understand the workings of specialist markets so, to try and help, I thought I would advise on the evolution of market reality and the drivers effecting pricing; including what that will then mean for prices. 

In truth the sentiment contained within the title above could be applied to all the owners of specialist high performance cars, not just Porsches; the same disposal and trading challenges apply although they all have their own individual markets, within the market sector as a whole. I could’ve just as easily substituted Porsche for Lamborghini, McLaren, Bentley, Maserati, Aston Martin or included BMW M Power models, Audi RS Models and Mercedes AMG models. 

So why do I predict such a challenging market for owners trying to dispose of high performance specialist cars? Well, as much as I don’t want to repeat the content contained within the article above, (those interested can find the article on my Used Car Business Development Blog by following the embedded link), in reality there are two fundamental challenges; the market itself and the understandable lack of experience in the market by owners. So let’s start with the market, because as explored in greater detail in the previous article above, it’s very, very quiet! 

The market (and therefore prices) is driven by a lot of things but consumer confidence and sentiment drive markets at the retail end of the high performance specialist car market; supply and demand then drives prices. That said there are markets within markets, where factors like funding structures effect the ability to sell your car, therefore both saleability and pricing. 

So in isolation, let’s look at the Porsche market; one containing many individual markets; the new/nearly new market, the second hand market and the classic market. Ignoring the classic market for this article, let’s first look at the new/nearly new car market. With new car production still facing some challenges this has led to some Porsche retailers paying over the “Original” list price new for some under 2 year old cars. However I predict this window is closing as a lot of this stock (that purchased as long ago as August/September 2021) remains unsold within the Porsche retail network, thus reducing the networks ability to keep investing in further stock and more importantly, effecting stock investment confidence. 

So for the owners of up to 2 year old cars, especially 911’s and other desirable low production models; those 1 owner vehicles with high/unique levels of specifications and low mileages, there still may be hope of securing the last of the “Silly Money,” but be quick; I predict that this will not last much beyond the Easter break. 

For traditional used cars though, the market is becoming a lot more challenging, with the “Perfect Storm” of negative market drivers forming over the market; all of which will affect the owners’ ability to sell their car, most of whom then fall into the trap of trying to retail the car themselves via platforms like Autotrader or Pistonheads. 

Now, as understandable as this thought process may be, this is a ridiculous strategy and notion, the reasons for which are so expansive, (so not for repeating here) but are all explored in the article below; 

A Public Service Announcement For The Owners Of High Performance And Specialist Cars!,,,,, 

In the article above I explored all reasons why, in reality, this process is flawed, but one thing making the sale of older high performance and specialist cars far more challenging, is the changing finance market. 

Competitive and creative funding structures play a pivotal role in the sale of specialist high performance cars; with the vast majority of purchases involving a funding structure that includes a deferred payment in the form of a guaranteed residual value/buyback value. What most would understand as a PCP or Personal Lease agreement. 

These funding structures/agreements are vital to the specialist high performance market as they bring increased levels of affordability to the expensive car market. However remove the deferred payment structure (the finance agreement involving a guaranteed residual value/buyback value) and the funding landscape changes dramatically; with the cost of acquiring a vehicle increasing substantially. 

In the last two months, and since writing my previous article, it has been interesting to see how many finance companies are now removing these funding structures for older cars and this further effects the market, making selling the stock involved considerably harder; which can only be “Hedged Against” and overcome by offering this profile of stock at far lower retail prices. 

So if this is an abridged summary of the market challenges, let’s explore some of the personality traits conspiring to stop owners from being able to dispose of their cars. In the main there is a lot of misplaced hubris bordering on arrogance when it comes to many owners, many of whom completely overestimate what it is they have for sale. Too many think they have bought an investment; the vast majority haven’t, what they have for sale is a premium product that depreciates at a slower rate, but one that has very few routes for disposal. 

Most like to also forget the price of reconditioning and preparing cars of this ilk for sale; it is an inconvenient truth that the costs of running, servicing and preparing these cars for retail is extortionate. Yet all this gets forgotten in the mind-set of the vast majority of owners looking to sell their specialist high performance car, because their car is different, the best available and not effected by market forces. 

I could go on but I won’t, I will just recommend that all those with a specialist high performance car to sell, (those with it currently up for sale on Autotrader and/or Pistonheads and wondering why the phone isn’t ringing), take a moment to look beyond their car and look upon it as being no different to a Mars Bar; a commodity that has a value. 

For most reading this, the decision is one of whether to take the money today or waiting for prices to recover from the correction that is coming. Now predicting prices 12 months hence is difficult; in truth I don’t get involved, but one thing I do know is that price corrections are expensive and not gradual affairs. 

When you enter a market with little stock investment liquidity and low consumer confidence, (as we are now), only the finest most unique examples tend to find competition for purchase, thus sensible offers. For the rest the onus is on you to convince those with cash to spend that yours is the car they should be buying, which is possible, but you only have one thing to offer; a car at a price! 

In market conditions like this prices don’t correct by small margins, they correct by 10 – 20% from their previous high; and that is for the best stock, many will struggle to find offers at all. For many reading this article, those not needing to sell their car, they can afford to gamble and look to return to the market when it has stabilised at it’s new level; probably in 12 months’ time.  

For those needing to sell the picture is very different and my advice is to get ahead of both the depreciation curve and market sentiment whilst you can. This will not be palatable and/or enjoyable but if you need the money, take it now; the first offer will always be the best offer and with the market evolving as it is, procrastination will cost you £Thousands. 

So with liquidity in used car markets running out, where to turn now for the owners of specialist high performances cars; those looking for the right expertise and experience? That required to facilitate in the immediate liquidation of their car; a process requiring skill, expertise, the utmost discretion and excellence in execution? 

Well with funds available for immediate purchase and unrivalled experience in liquidating specialist high performance cars, including the contacts base within the professional community, (both franchised dealers and the most knowledgeable specialists), you could contact me for a market consultation. 

As much as I am not going to promise you for one moment that I work with every car that is offered, or with every owner that contacts me, I do choose to advise and help everyone who contacts me. In reality I can only work actively with 10% of the owners who contact me; and their associated cars. 

Offering immediate cash purchase, (should circumstances dictate), or the facility to act as your trusted conduit to the market, returning the best prices, I am the ultimate solution provider for those looking to dispose of their specialist high performance car. 

Please feel free to reach out to me directly on LinkedIn, via email at andrewb@andrewbanningsalessolutions.co.uk or on 07500 321539; should you wish to arrange a consultation call. 

Happy Easter everyone,,,,,,, 

Andrew.

Are We Buy Any Car Learning A Painful Lesson? 

In my opinion the answer is yes and this will result in a very challenging disposals landscape for all owners looking to sell their car; not just those looking to dispose of high performance specialist cars. The customers with whom I am working. 

To add clarity to my opinion, let me give you all some feedback from the country’s much talked about valuation and disposals portal; and here’s the headline figure. From my evidence, (which is available to anyone requesting it – including the lawyers acting on behalf of the company), during the period between 15th and 31st March We Buy Any Car have reduced some valuations by 9.4%. Yes, you heard that right, 9.4%; a huge market correction within 16 days and one that will have ramifications for the market and We Buy Any Car. 

Now bearing in mind that markets for the stock profile concerned (or any stock profile that We Buy Any Car will be acquiring) haven’t moved that much, the real question is why the collapse in their offer prices? To answer this let me first advise everyone how I use We Buy Any Car Valuations to gauge their sentiment in the used car market. 

Being a stock acquisitions professional myself it is important to know what the competition are up to. Although We Buy Any Car aren’t my direct competition (I am operating in the specialist high performance car market – one their algorithm can’t navigate and compute) they are an important barometer to how the logarithm based on-line disposal companies are operating; and, more importantly indicative of how they are still unable to accurately read the market and values. 

This is important because courtesy of Philip Schofield they are in everyone’s psyche; with their advertising programme (so effective) that they have convinced the British pubic that they are the “Go To” company for the disposal of their car. All of which is very important when you understand the ownership model and the umbrella of companies under which We Buy Any Car sits. We Buy Any Car are owned the auction house BCA, which also owns the on-line used car retailer Cinch; remember Rylan Clarke and all the associated adverts? Now in the battle for used car market place share 

We Buy Any Car is important to Cinch, which will need used car stock at an industrial level if the bills are to be paid; Rylan and Philip will not be cheap! 

As a consequence of all this I continually put a selection of vehicles through their valuations process to gauge the effectiveness of their valuations algorithm; the results of which are both interesting and alarming. So why do I think they have reduced their valuations by such a degree? 

Well Cinch are likely to have many operational and delivery problems, some of which were explored and discussed in the recent article written for my Used Car Business Development Blog, link below; 

Cinch, Cazoo or Carzam? Who Will Be The First To Fail? 

But from what I can see their main problem is their stock level and slowing sales; selling stock at a profit is (of course) vital to the success of every used car business, even Cinch. On the day of writing this article (1st April) Cinch had 10,617 cars in stock; that is double the stock holding I have noticed them carrying thus far this year and significantly more than one of their online competitors Cazoo; who on the same day was carrying 6,686 cars. 

Now there are many reasons why Cinch are likely to have gotten into this position, not all of which can be covered in detail in this article, but their problems will include the following. 

• They misread the market and weren’t buying at the start of the pandemic when they should’ve been. 
• They then joined the “Blind Leading The Blind” feeding frenzy for stock, (along with the associated prices), when they should’ve been focused on retailing and buying selectively.  
• Purchasing via a valuations logarithm; which appears to be not fit for purpose and working from a too narrow and flawed data cut. 
• A quantity over quality purchasing environment. 
• Over reliance on technology and no access to the used car business development professionals required. 
• Their model is only fit for purpose in one market but is being deployed in multiple used car markets, in the hope of adding scale. 

But the issue I want to discuss here is the problems associated with valuation algorithms and then using a valuation algorithm to scale up a used car business. I want to look at this because you can’t achieve profitable scale in multiple used car markets, let alone via a valuation algorithm. In reality Cinch (just like Cazoo no doubt) are discovering the limits of their valuations process and have been caught out. 

There is no doubt that in certain used car markets a valuations algorithm can drive used car success, but it is only as good as the data put into the algorithm; and in the fragmenting used car market of today, it would appear that Cinch are trying to operate in many used car markets, having acquired stock via the same method; their valuation logarithm. 

My suspicion is that (and I am happy to be corrected by the person responsible at Cinch) the data for the valuations algorithm is supplied by their auction business; BCA. Now the value of this data is highly questionable; it is too narrow in profile (age and mileage), provided by an unknown mix of private and trade buyers, and is not supported by any ongoing retail sales data. All of which was further explored in the article referenced above, when I did warn that the money would run out! 

So what does this mean for the market, values and for those looking to dispose of their car? Well in truth the unsustainable crazy market of the last 12 months is beginning to unwind and effecting sentiment within all used car markets; albeit to varying degrees. Now this is not the article to further expand on this important market dynamic; those interested in a more in-depth analysis can feel free to follow the link to my article below, where this trading issue is explored in more detail. 

Wave Goodbye To Top Prices For Specialist And High Performance Cars! 

Unfortunately the trading reality and behaviour patterns of the used car market at the moment, reminds me of the used car market experienced during the financial crisis; a market when liquidity for stock investment ran out, albeit for different reasons than the market of today. The liquidity problems of today are all caused by inexperienced professionals not knowing how to read the market and paying too much money for stock, in order to cover for their lack of used car stock acquisition expertise. 

The majority of this stock remains unsold and can now no longer be profitable; and with the businesses concerned unable to liquidate at the trade losses involved, (in order to free up funds for fresh stock), they are tied into reducing the scale of these losses via retailing, which will take time. 

I have no doubt that this will be behind We Buy Any Car’s reductions in their offer prices; I doubt they will ever state again that they are not buying, as they did in the pandemic, which was no doubt damaging to the business. Albeit by cutting offer prices by so much, this in effect is what they are saying, to those in the know! 

In reality, the job of reducing exposure to their current used car stock holding will be very challenging and take time. We Buy Any Car are a “One Trick Pony” used car business relying on tech and not the professionals required to keep acquiring used car stock and retailing it at a profit. As we are seeing, the tech has many limitations; getting your business into dire trouble though, does not appear to be one of them! 

So with liquidity in used car markets running out, where to turn now for the owners of specialist high performances cars; those looking for the right expertise and experience? That required to facilitate in the immediate liquidation of their car; a process requiring skill, expertise, the utmost discretion and excellence in execution? 

Well with funds available for immediate purchase and unrivalled experience in liquidating specialist high performance cars, including the contacts base within the professional community, (both franchised dealers and the most knowledgeable specialists), you could contact me for a market consultation. 

As much as I am not going to promise you for one moment that I work with every car that is offered, or with every owner that contacts me, I do choose to advise and help everyone who contacts me. In reality I can only work actively with 10% of the owners who contact me; and their associated cars. 

Offering immediate cash purchase, (should circumstances dictate), or the facility to act as your trusted conduit to the market, returning the best prices, I am the ultimate solution provider for those looking to dispose of their specialist high performance car. 

Please feel free to reach out to me directly on LinkedIn, via email at andrewb@andrewbanningsalessolutions.co.uk or on 07500 321539; should you wish to arrange a consultation call. 

Andrew.

An Idiots Guide To Used Car Stock Acquisition!,,,, Article 2!,,,, 

Welcome to the final article in the recent series of four, all covering the used car market and its number one operational survival challenge; that of successful used car stock acquisition. For those who have missed any of the previous 3 articles in the series, please find links to the articles below on my Used Car Business Development Blog; 

The Franchised Dealer Fight For Survival That Not All Will Survive! 

An Idiots Guide To Used Car Stock Acquisition! 

Not Listening Will Ensure That Franchise Dealers Fail! 

Briefly; in the 3 articles listed above I discussed the challenges coming to the automotive sector, the existential threat facing all businesses due to depleted used car vehicle parks along with the ramifications; and then I began to explore the mind-set required of the successful used car stock acquisitions professional. 

In this, the 4th and final article in the series I will expand upon the skillset and level of expertise required in the successful used car stock acquisition professional, in order to help those looking to fulfil this role within their business. In many ways this is the most important article, in terms of providing some clarity, because from what I have seen of late, the vast majority of businesses grasping the importance of this role are going to get this appointment wrong. 

I have seen many posts on LinkedIn and job adverts for used car managers recently, those looking to combine the role of used car management with that of used car stock acquisition; and what has struck me is how the industry appears to recruiting in the past, when used car markets have moved on and evolved at a pace. Now this is not surprising as those posting and responsible for the employment process have no experience of building successful used car businesses; well not according to their LinkedIn profiles, and understandably this is leading to mistakes. Mistakes that will be very costly. 

The most common and fatally flawed mistake being made is that of combining the responsibility of used car stock acquisition into the Used Car Managers role; when they are two very different fulltime roles. Now as much as it is important to staff your business in line with your used car objectives, only those with the most modest of used car retailing ambitions for their used car operation can afford to do this. The very act of which though will then consign their used car business to a downward spiral of sales and profitability. 

The reduced used car vehicle parks of 2023 onwards and the competition for them, all explored in the articles above, will fatally expose the fact that the vast majority of independent used car business and franchised dealers are years behind the curve, when it comes to used car stock acquisition. With most seeming incapable of grasping that those who control access to used car stock, will control access to the used car market. The end result being that the vast majority of used car businesses are underprepared (without the professionals required) for the used car markets to come. 

To help let me explore the role of the successful used car stock acquisition professional, because it has absolutely nothing in common with the used car managers’ role now. Unfortunately though it is also a role that franchised dealers have no experience of, therefore they are going to find it difficult to know the skills they need to be acquiring; so with this in mind let me help by exploring the skill-sets required. 

Firstly, and this important, the successful used car stock acquisition professional is a personality and professional not known to many franchised dealers or independent used car businesses, especially those of the big PLC’s. They are a ruthlessly determined individual that will challenge existing thinking, (in terms of what will be required to be successful), because they know that it is their ability to acquire and secure used car stock holdings in both the volumes and at the prices required, that will ensure used car profitability. 

The way they work and the way that they are remunerated will be different to anyone else within the business. In fact, if they are successful they will be the highest paid individual in the business. 

They are going to have to build trust within the business that they can do the job, and the business will need to trust them explicitly to deliver; remember at all times that you can’t manage a role you don’t understand. For the majority of the time they will be operating in a way that is alien to a franchised dealer, whilst asking some challenging questions along the way; something that will and should start during the interview process. 

In fact the interview process should involve a lot of deeply probing financial and operational questions that you won’t expect and/or necessarily know the answers to; and this will probably result in it being quite an uncomfortable experience; for you. 

I will guarantee the majority reading this article that you will find them very challenging professionals, in fact they will probably not fit in with your existing team and you probably won’t like them (personally). But this should be the last thing on your mind, they are a professional operating in a cutthroat sector of the used car market and will be operating accordingly. 

Theirs is not a market for niceties, theirs is the market of unrelenting focus and the ability to target and secure profitable used car stock holdings; and it is very likely that what is required here (operationally) will probably leave you spellbound. The most demonstrative way for me to provide clarity is by outlining some of the questions that any successful and proven used car stock acquisition professional will ask you during an exploration discussion. 

The questions below are the very least you can be expected to answer and will include all the important financial, operational and business ethos reassurances required. Successful used car stock acquisition professionals do not board sinking ships! 

• What is the budget for the used car stock holding? 
• Is there a separate budget for used cars stock acquisition? 
• Are any of the budgets protected from ex-demonstrators, pre-registrations and part exchange vehicles? 
• Is the budget fixed or flexed via a budgetary cyclical understanding of the used car market?  Are there any additional funding sources? 
• If yes; how many, during what periods is the funding available and what’s the total amount available? 
• Is the sales team split between new and used car sales? 
• Is there a standalone used car manager? 
• How many used cars did the business retail last year, excluding ex demonstrators. 
• What was the average RGP per unit? 
• What is the retail used car target for this year? 
• On a month by month basis, how many used car are secured and coming into stock over the next 12 months? 
• What is the “Ring Fenced” marketing budget for used car stock acquisition initiatives? 
• Will this be increased to allow for expanding the initiatives required and that associated with larger used car stock acquisition targets? 
• Is there a monthly target for used car stock acquisition? 
• What are the used car stock acquisition targets for the next 3 years? 
• What is the likely new car allocation during this period? 
• What is the split between retail and corporate/third party sales? 
• Who makes the decision to stock used cars I have purchased and secured? 
• It not wanted for used car stock (there will and should be a surplus) am I in control of routes of disposal and therefore the associated profit margins form all the cars involved? 
• In the disposal of this stock I will probably not be adhering to any disposal policies, (“All-Auction” or otherwise), unless I am absolutely convinced that it would return the maximum profit margin for the business. I assume that this will not cause any issues? 
• What personnel support resource is aligned to the used car stock acquisition department/professional? 
• What is the social media strategy for the business and what social media platforms are incorporated within any strategies? 
• As a successful used car stock acquisition professional I will also be utilising my own established social media platform, alongside enhancing and expanding the social media presence associated with the business and used car stock acquisition; I am happy to expand upon what’s involved but assume there will be no problems with the aforementioned. 
• Is the business ready for the inevitable fallout surrounding the targeting of the customers bases of fellow businesses within our franchised dealer network? 
• How will I be remunerated within the role? 
• Before agreeing to take the role, I will need to present my strategy to the board and/or owners of the business. I will do this to gain the assurances required for accepting the role; I assume this will be possible? 
• This is a very senior self-managing role so I will need to report to board/owners of the business, and them alone; I assume this is acceptable? 

The questions above, regardless of the size of your business are the questions you should want to be asked; if you are not, then trust me the person sitting opposite you is not the professional you require. 

Unfortunately you will find the professional with this level of acumen, one who knows what the answers to the questions above should be and therefore what will be required operationally, very hard to find; there are not many of us about. 

For those grasping the seriousness of their current situation, those wanting to take immediate action, (now that used car market opportunities are identifying themselves), I will be working with three businesses over the next 12 months to deliver the used car stock acquisition expertise and initiatives required, for those businesses to survive and prosper in the used car market to come. 

These will not be arrangements for consultancy; these will be outsourced resource success based arrangements, delivering used car stock acquisition success to those I am working with. 

Should you wish to explore synergies and the potential to collaborate in this regard, please do not hesitate to contact me so we can arrange a mutually convenient time for an exploratory call; when we can start by discussing and exploring the answers to the questions above. 

Andrew.

The Last Place You Will Sell Your High Performance Specialist Car?,,,,, Look Above!,,,,, 

In my last article; A Public Service Announcement For The Owners Of High Performance And Specialist Cars! 

I explored the folly of trying to sell a specialist high performance car on Autotrader; or any other retailing portal for that matter. It is fair to say that it generated quite a lot of comment and debate, so much so that I was asked to explore and expand upon the subject in greater detail. 

So in this article I will strip bare the process involved and explain why I think the very last thing portals like Autotrader are bothered about is actually the sale of your car; if they were the business would operate very differently. But before launching into the article itself let me add some context; I have never worked for any of the companies that I will reference, (in the main Autotrader - because I think they are the worst culprit), and I respect that it is everyone’s right to try and dispose of their car in the way they see most fit. 

The purpose of this article is to expose the flaws, the misrepresentations and to encourage some forethought in the owners of specialist high performance cars; so off we go! 

As explored in the article above, (not to be revisited here – please follow the link above to find the article on my Used Car Business Development Blog), the process of trying to sell any expensive car via Autotrader (or PistonHeads for that matter) is highly flawed. Now I know that there will be some reading this article who have managed it, but I want to look specifically at premium, specialist and high performance market, and those owners with a car to sell within these markets. 

So aside from the market dynamics let’s look at the process involved in selling a car on Autotrader and let’s get one thing straight; in my opinion Autotrader aren’t bothered whether you sell your car or not! Now most of you may struggle with this concept until that is, you realise that Autotrader is a data collection company first, not a sales portal. Collecting information and data that you supply and that Autotrader charges you for. 

So if my suspicions are correct those who advertise on the portal are paying to grow the business, by supplying what it most covets; data and personal information. But for the moment let’s look at the process of selling your car via Autotrader, and this is how it works. Go onto the Autotrader website and will find that it will cost £84:95 to advertise your car as a private seller on Autotrader; if the selling price is over £10,000, as all will be in these markets. 

Although there are cheaper time specific sales options available, this is their most cost effective package because it continues to advertise your car until it is sold. Now to put in to context just how much money Autotrader is making from market naïve private sellers; on the day of writing this article (30th March) there were 3,259 BMW’s being sold by private sellers, priced at over £10,000. That’s (3,259 X £84:95) £276,852 in revenue; provided of course they all paid for “The Advertise Until Sold” option. 

From this page you are then invited to enter the details of the car you have for sale, registration number and mileage. Now in order to offer a representative commentary I didn’t opt for a highly specialised, expensive high performance car; this would be both unfair to Autotrader and not representative of most potential customers. So with this in mind I entered the details of a Mercedes Benz. 

Once you have supplied this information Autotrader will advise you on what price to advertise the car for! Now this is an important point and one that I must ask all reading this to sink in. This is Autotrader and their data algorithm telling people what to advertise a car for; they then go on to confirm just how much more their recommended sale price is, when compared to what I would be offered in part exchange or from, and I quote, a “Quick Sale Website!” 

It is important to appreciate at this point that Autotrader is not a used car retailer and/or business; nor is it a business that employs, (from what I can see on their company page on LinkedIn), any senior professionals with any experience of growing successful used car businesses. So I have to ask the obvious question; how do they think they can advise on market values? And to add context, let’s explore the market for the car I put through their algorithm on 30th March; a 2019 Mercedes Benz A180d SE, with under 11,000 miles. 

Autotrader advised that the retail price for the car was £19,440 and went on to confirm that this figure was “At least £1,530 more than I would be offered in part exchange or from a quick sale website.” Quite frankly this is utter crap and misleading! Autotrader have no idea what I would be offered in part exchange; a figure determined by many things. The car I am purchasing, the underwrite obtained, the margin across the car I am looking to purchase and the commercial pressure the selling dealer is under to sell. All of which Autotrader has no idea of! 

Now one area where they were right, although they have no access to the offers made by quick sale websites, was that their recommended retail price was at least £1,530 more than the £16,770 offered on the same day by We Buy Any Car; a quick sale website. But the difference between the two prices of £2,670 is worrying because average margins like this are unrealistic on stock of this profile. 

Now although I have my criticisms of We Buy Any Car, unlike Autotrader they do deliver on what’s written on the tin; they do purchase cars; Autotrader do not! Ergo one of the prices must be wrong; I would hasten to add that it is not the one offered by We Buy Any Car. So I decided that, should I decide to follow the questionable advice from Autotrader, how would my car fit into the market? Well the answer wasn’t very promising. 

On the day that Autotrader advised me to advertise my car for £19,440 you could purchase an identical car from a Mercedes Benz approved retailer for only £548 more; £19,998. Now I am sorry but the idea that a customer would come to my driveway with no legal protection, to purchase the same car to save only £538, (when compared to the same car supplied by a Mercedes Benz franchised dealer), is laughable. 

Even more so when you consider that there appears to be an oversupply problem for this model at the moment. When looking at Autotrader itself and on the Mercedes Benz Approved Used Car Locator, there were an additional 186 and 67 similar age and mileage examples to choose from. That is a lot of competition and a very challenging retail market to be entering as a private seller with no experience. 

Then we come to another problem; any potential customers searching on Autotrader will be (very helpfully) guided on the price that the car is advertised for. Now rather duplicitously Autotrader will make an ill-judged and ill-informed comment on the prices being asked for by trade retailers, in terms of their pricing. It wouldn’t (so doesn’t) do this on the private seller adverts but by default does so, because all the comparable cars can be listed in with all the trade adverts; priced lowest to highest. 

Now I have a got a lot to say about this (probably for another article) but in the interests of brevity let me explain what I think is happening here. Autotrader, (the data collation company masquerading as an advertising portal), is using data from its own site (data from customers who have paid for the privilege), to then masquerade as a pricing portal; all whilst having no senior and/or genuinely successful used car professionals to call upon. It then uses this data to incorrectly value your car and take your money! 

From there, and having taken your money, it then comments on the prices of all the competition your car is up against, (from adverts in the trade), because it wants to be seen as the consumers friend. In my opinion you can’t be both the consumers and the sellers friend, there is a conflict of interest; a circle that is impossible to square. 

But your money is the lifeblood of Autotrader, so this conflict of interest isn’t mentioned. I think those about to spend their money to advertise their car should be warned about this feature; the reason why they are not is because you probably wouldn’t want to advertise your car, if you knew the realities. 

Then we move on to contact details and how Autotrader refuses to put you in direct contact with anyone expressing an interest in your car, via hiding both of your contact details. Now this really gets my back up and I know exactly what is happening here; Autotrader never wants you to have the direct contact details of interested parties. Despite paying to advertise your car? 

Now Autotrader will tell you that this is for your own protection; just think about that for a moment. Autotrader are trying to protect you from what? And if they know you need protection from something, why are they taking your money to put you in that position? In truth these are not my questions to answer, they are for the CEO of Autotrader (Nathan Coe) to answer. 

I suspect that the real reason for this is to keep you spending money, if you haven’t already paid for their “The Advertise Until Sold” option. The last thing they want is for either party to be able to contact each other once an advert has run its course. This quite frankly is outrageous; they take your money then make it very difficult/impossible to get in direct contact with interested parties. 

It would be reasonable to think that with the levels of income outlined above, it would be in Autotrader’s best interest for you to sell your car; and if it is, my question to Autotrader is why they then make the process, (one that they know is flawed for all the reasons explored in last week’s article), so onerous, misinformed, difficult and clandestine? 

In reality though these are not my questions to answer, just issues to comment on. I will leave all this commentary with potential customers to assess the value in what they are getting for their £84.95. If I am wrong on these points I willingly invite the CEO of Autotrader (Nathan Coe) to contact me directly; when I will gladly review their data sources with him and publish an article to put the record straight; should that be required? 

But in the meantime, where to turn for the owners of specialist high performance cars looking for the right expertise and experience, that required to facilitate in the immediate liquidation of their car; a process requiring skill, expertise, the utmost discretion and excellence in execution. 

Well with unrivalled experience in liquidating specialist cars and the contacts base within the trading community, (both franchised dealers and the most knowledgeable independent specialists), you could contact me for a market consultation. However I am not going to promise you for one moment that I work with every car that is offered, or with every owner that contacts me. 

In truth I choose to advise and help everyone but only work actively with 10% of the owners who contact me; and their associated cars. Offering immediate cash purchase, (should circumstances dictate), or the facility to act as your trusted facilitator and conduit to the market, delivering the best return for your specialist high performance car; I am the ultimate solution provider for those looking to dispose of their vehicle. 

Please feel free to reach out to me directly via LinkedIn should you wish to arrange a consultation call. 

Andrew.

Not Listening Will Ensure That Franchise Dealers Fail!,,,,, 

Five years ago in June 2017, when my Used Car Business Development Blog was in its infancy, I wrote and published the article below; 

Not Enough Used Car Stock = Not Enough Used Car Sales 

Now this is not an “I Told You So” article that just isn’t my style! However in the article I predicted many things that have come to pass, and I wanted to revisit this article and the themes covered, as today they are more important than ever. Plus it helps to expand upon the two previous articles I have written recently, (in a series of four), designed to cover the vital role that successful used car stock acquisition initiatives are going to play in the survival of franchise dealers (in fact all used car business) over the next 2-3 years. 

The Franchised Dealer Fight For Survival That Not All Will Survive! 

An Idiots Guide To Used Car Stock Acquisition! 

I won’t spend time here revisiting the topics covered in the two articles above, which would only ensure that we lose the important thread to be explored in this article. But for those looking in some understandable bewilderment at used car stock acquisition, I would recommend you find the time to read them both, as then this article, (along with the last in the series to be published next week – the one to cover the professionals required), will make a lot more sense. 

Those of you who have already read the articles above will know that, in this article, I wanted to explore the decreasing size of the used car market and the impact that this will have on all used car businesses and franchised dealers. It is fair to say that a “Perfect Storm” is forming over the automotive sector at the moment; one which will render the successful transitioning, a very challenging process, one that not everyone reading this can survive. 

Now as much as your trading landscape is nuanced depending on the manufacturer you represent and therefore the market place you inhibit, you all have your challenges. Many of you are now learning about your parent manufacturers’ desire to transition to an Agency Model for new car retailing, (Volvo, Alfa, Lotus and Cupra come to mind), many will know it’s coming and are awaiting clarity. 

Running alongside this evolving new car retailing landscape is a fragmenting, decreasing and evolving used car market; one that is breaking up into individual specialist markets, all of which will have their own unique operational and trading challenges; so there is a lot happening. To most reading this, the evolution of the new car market presents some problems, the main one being reduced levels of profitability and too late for some, it brings successful used car retailing into sharp focus; and I say too late for some because it is just that. 

For many there is going to be too much work to be done. The businesses concerned are so too far behind the curve (in terms of used car business development acumen, operational expertise and the professionals required) that the harsh financial realities of business will result in their business failing sometime during the next 12 – 36 months. All because they ignored articles and market place commentary, such as was contained in my article from 2017. That, or they just couldn’t be bothered to my make the investments required; along with completing the hard work required? 

And I make this assessment because of the used car markets of both today, and more importantly those coming in 2023, 2024 and 2025; those effected by the reduced used car vehicle parks, coming as a consequence of the drastically reduced new car registrations during 2020, 2021 and 2022; and maybe thereafter. The result of which has delivered the same existential operational challenge to everyone; that of successful used car stock acquisition. 

If your new car market is over 680,000 registrations down on the previous trading year, as it was in 2020, then the used car market is about to suffer, (in terms of stock availability), and the fight for these stock holdings is well and truly underway. Without the expertise to secure access to, and the expertise to lock future used car stock holdings into returning to successful used car retailing operations, you will unfortunately experience a used car business in terminal decline. 

To add context let’s look at some of the challenges facing a few manufacturers and their franchise dealer networks. To do this I will compare new car registrations between 2019 and 2020 (the first year effected by the pandemic) and break down what it means for used car retailing. 

So let’s start with Volvo, a manufacturer who has brought immediate focus upon their used car retailing model; following their recent announcements covering their transition to an Agency Model for new car retailing and their Volvo Selekt Direct, (direct to the consumer), used car offering. Subjects covered in great detail in the article below; 

Volvo Selekt Direct?,,,,, How To Snatch Defeat From The Jaws Of Victory? 

Well in the challenging markets to come for the Volvo franchised Dealer Network, there is a major “Elephant in the Room!” In 2019 Volvo registered 56,208 new cars in the UK; a number reduced by 17.4% in 2020 to 46,403. 9,805 fewer new car registrations; a number that flows straight through to the used car markets of 2 -4 years’ time. 

Aside from competing with the manufacturer for used car stock holdings, this reduction equates to an average of 100 less used cars for each of the 98 Volvo franchised dealers in the UK. This (along with the announcements explored in the article above) leaves the Volvo franchise dealer network in a trading environment best described as a fight to survive. One with successful used car stock acquisition initiatives at the foundations of any future success. 

For BMW franchised dealers the picture is just as troublesome; In 2019 BMW registered 169,753 new cars in the UK; a number reduced by approximately 32% in 2020 to 115,500. 54,253 fewer new car registrations and again a number that flows straight through to the used car markets of 2 -4 years’ time. 

That equates to an average of 362 less used cars for each of the 150 BMW franchised dealers in the UK. 

Finally I thought I would look at the Lexus franchised dealer network; unfortunately the picture here is just as troublesome. In 2019 Lexus registered 15,713 new cars in the UK; a number reduced by approximately 12.6% in 2020 to 13,727. Although only 1,986 fewer new car registrations, it is once again a number that flows straight through to the used car markets of 2 -4 years’ time. 

That equates to an average of 43 less used cars for each of the 46 Lexus franchised dealers in the UK. This doesn’t sound much when compared to the reductions explored above, but with smaller new car allocations this number (along with the associated profits) will be just as difficult to make up. 

So, coming back to the beginning; every franchised dealership and used car business is in a battle for survival. Even if you just want your business to stand still, in terms of profitability, you have a monumental fight on your hands; and that’s before we start looking at what will be required to grow retail profits. Unfortunately not everyone will survive this Darwinian process; and to add further context let’s look at the trading reality coming to the BMW franchised dealer network. From the figures above, and assuming the BMW network are making an average of £1,500 RGP per used car, (it will be greater or lesser in reality – depending on the current size of your used car business), they all have a £543,000 hole in your trading accounts to fill! So with the clarity provided by these figures, if I was still running a BMW sales operation, I would planning from which of my competitors (fellow franchise holders) I would be taking future business from and how I was going to do it? 

In truth this will only be achieved via aggressive and successful used car stock acquisition programmes; those that you won’t know how to construct and deliver, or have the professionals required within your employ. I can say this because I know how the used car stock acquisition landscape has been evolving and franchised dealers are being left behind in the battle to secure future used car stock holdings; both in the volumes required and at the prices required to ensure that they remain profitable. 

The successful used car stock acquisition professional is a professional not recognised by many franchised dealers, and certainly not by manufacturers. The role has become a highly specialised role over the last 10 years and whilst franchised dealers are still leveraging the initiatives of 20 years ago, others have moved the role on to a degree that would leave franchised dealers dizzy; at the thought of comprehending what is going to be required to be able to compete. 

In my next and final article in this series I will further expand upon the role of the successful used car stock acquisition professional, and what is required to construct and deliver the used car stock acquisition initiatives required, in order to claw back used car market place share and to then grow profitability. 

However for those wanting to take immediate action, (now that used car market opportunities are identifying themselves), I will be working with three businesses over the next 12 months to deliver the used car stock acquisition expertise and initiatives required, for those businesses to survive and prosper in the used car market to come. 

Should you wish to explore synergies and the potential to collaborate in this regard, please do not hesitate to contact me so we can arrange a mutually convenient time for an exploratory call. 

Andrew.