Fleet News

Used LCVs: Dealers miss out on profit

 

Many commercial vehicle dealers could easily close more deals and improve profit margins if they put greater effort into appraising used stock more thoroughly, according to
EurotaxGlass’s, publisher of Glass’s Guide to Commercial Vehicle Values.

Trade buyers typically overlook condition and are offered vans ‘as they stand’ at a take-it-or-leave-it price.

However, this should not alter the need to reflect the standards that retail customers demand and take a professional approach when selecting and pricing stock.

George Alexander, chief commercial vehicle editor at EurotaxGlass’s, said: “If offered a late-year van worth £8,000, which on inspection needs de-signing, servicing and valeting together with a tyre or two, we might presume that the cost of prepping this van up for retail sale will be at least
£750.

"Therefore, an equivalent amount of your profit will be lost if the purchase price is not negotiated down by at least this
amount.

“If bodywork or interior trim is below the standard that the typical retail customer demands, then the full cost of any necessary rectification should be deducted from
the buying or selling price.

"On the flip side, an exceptionally well-prepared vehicle,
presented without fault and boasting worthwhile extras, merits a price premium.

“Dealers will often baulk at the cost of having vans valeted, or for rectifying minor blemishes to trim and paintwork, on the
basis that these costs come straight out of their profit.

"The counter argument must be that, without giving retail stock every chance of attracting a punter, fewer deals
will be closed and there will be fewer opportunities to make money.”

Experts at CAP agree. A spokesman said: “It is condition and usage that determine success at selling time and with reports of the spiralling cost of reconditioning and rectification, it is easy to see why some vehicles are simply ignored.”

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