Fleet News

Competition will hot up for share of used car market

COMPETITION for a share of the £26 billion UK used car market is set to intensify as new players enter the market. Giant car supermarket sites have established a firm foothold in the second-hand car market, and they will increasingly be challenged by dealerships which have lost their franchises, according to 'The Used Car Market - A 1997 Report', compiled by British Car Auctions and Sewells International.

'The move to larger marketing territories for dealers of some marques will help them add power to their used car marketing efforts through their hub and satellite outlets,' it said. 'However, many franchised dealers shaken out by this process will turn to the used car sector to make a living.'

This competition will be focused among the resale of newer cars where franchised and non-franchised dealers enjoy the lion's share of the market, responsible for selling 90% of cars under two years of age, and 76% of cars aged between three and five years. If this puts pressure on margins, the report believes the sale of finance will continue to be a major source of profit, especially since this is unlikely to be constrained by the 0% or low finance offers associated with new car sales.

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