Dealers who take budget used car sector seriously experience strong demand and prices
Posted 16 May 2017
The budget used car market is on fire and is receiving record numbers of buyers and strong prices according to Aston Barclay’s group operations director Martin Potter.
And dealers should be taking this end of the market just as seriously as newer part exchanges as there is a healthy revenue stream to be had.
Generally few people comment on the Budget sector or take it too seriously but 400 buyers regularly turn up at Aston Barclay’s Monday night Chelmsford sale with two lanes selling between 400-500 cars every Monday night.
Used cars of between six to 15 years old change hands for between £200 to £12,000, with dealers reporting a healthy profit on stock, even those in excess of 100,000 miles on the clock and in relative condition for age and mileage.
“The Budget sector is a massive part of the used market. In 2016 NAMA reported that up to one in four used cars being sold was a budget car. Dealers shouldn’t just offer these cars to local traders for a quick sale as they could well be missing out on a healthy revenue stream,” explained Potter.
“Not every motorist can afford an expensive car or does the mileage annually to justify spending money on a newer car. Budget buyers are often getting into their dream car for the first time."
“These buyers are either bidding on cars at auction directly or buying a car from their local independent dealer. Whatever their source of stock our Monday night sales have been consistently busy for the past three years.”
German cars, SUVs, particularly Range Rovers, estate cars and MPVs are in high demand. The MPVs in particular often get purchased for use as a taxi and estate cars often support a buyer’s hobby or an SME will use it to support their business.
“Last Monday our regular car supermarket vendor made around 98% of CAP average and our local Vauxhall dealer made well over 100% of CAP average on their Budget trade ins,” said Potter.