Fleet News

Christmas is coming, and that's usually bad news for dealers

'THE usual meaning of the phrase 'Christmas has come early' is celebratory but in the motor trade it is a complaint. The annual grumble among dealers now is that Christmas seems to come to the showroom earlier every year.

As retail customers disappear off to do their own Christmas shopping and even the telephone falls quiet, the festive season is a trying time. This has been exacerbated by the introduction of a new plate in March.

Many dealers believe this has reduced overall demand in the early part of the year, effectively keeping a lid on demand during January and February.

So retail dealers and the trade are now entering their least favourite time of year.

Happily, though, there are not huge swathes of stock lying around and losing value as many disposal companies and manufacturers have stopped selling vehicles and are waiting until the new year to re-enter the market.

But while everything quietens down, so the big buyers turn their attention to the chance of buying cheap stock in December, ready for the hoped-for January stampede.

Getting the balance of stock right in December and January has always been difficult. But one factor that is gradually changing is the weather pattern, which used to influence car-buying behaviour.

I remember January once being impossible in car retail because of the virtual shut-down of the country due to snow and ice. Today's milder weather at least reduces that particular threat to profitable trading.

Ready for retail?

This year has seen condition and mileage continue their march as the driving factors in determining whether or not a car sells into the trade. And although stock shortages of late have led to some speculators buying cars in need of refurbishment cheaply, the rule remains – wherever possible only buy what is ready for retail.

There remains strong demand for good cars and this spells opportunities for disposers.

Recent research of our own has revealed that the amount dealers are prepared to spend on reconditioning varies little around the country. The typical figure is £200-£400, including service and a warranty.

But the good news for disposers again is that the majority of dealers researched prefer to pay more for the car upfront, if it means not needing to bother with those reconditioning costs at all.

Dealers' costs have spiralled in recent years and disposers can take the reconditioning burden off their trade customers' shoulders.'

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