Everybody expected a big March for new car sales and although it was only 1.5% up on last year, it is a move in the right direction. This has ultimately created an abundance of used cars, but unfortunately, they are the wrong used cars. Auctions are reporting that the cars being entered from the leasing industry have excessively high mileage.
At one auction last week nearly 50% of all cars entered had over 80,000 miles on them, with the vast majority of the rest having covered more than 70,000 miles. Other auctions are seeing similar patterns but the trade can only handle so many very high mileage vehicles. The demand simply is not there.
On the other hand, quality low mileage cars are still in short supply and are making good money if in the right spec and colour. An interesting point brought up by another auctioneer was that a leasing company had entered 102 cars but only four had an MoT certificate (88 were older than three years) and only 11 had V5s. This makes it such hard work for the auction company and does nothing to help achieve sensible prices.
As the 'softening' in the trade continues, every effort has to be made by the disposer to maximise the desirability of their products. Dealers are also reporting a quiet time on the used car forecourts with very little activity, even by tyre kickers. Franchised dealers are also sending their part exchanges to auction instead of keeping them for retail.
This is compounding the problem of the number of vehicles at auctions, although it is also increasing the competition and giving customers more choice.