The shortage of good quality used cars in the wholesale market is likely to ease in the final quarter of the year, but not by as much as some are expecting, says CD Auction Group.

As a result, trade auction values are likely to remain high through to the year end with buyers having to pay more to secure the right stock for customers, according to Roger Woodward, managing director of CD Auction Group.

“The market is still tight so condition and specification remain critical,” Woodward says.

“We know some fleet operators are tempted to extend contracts and that is adding to the supply issues. Actually, they might be better off letting the cars go now and taking advantage of the strong demand and  firm values.

“The good news is that trade buyers are back in the market looking for stock, but they’re still being highly selective and are only willing to pay good money for the right stuff; for the stuff they want. On the other hand, poorly-prepared undesirable vehicles are being left on the shelf.”

There are early signs of major fleet operators starting to remarket cars which were bought new in late 2009 when fleet sales started to recover (up 4% in Q4 2009). However some of the best stock is being kept ‘in-house’ and, where possible, going direct to franchise group retail sites.

And, perhaps as a reflection of the market, vendors are making more effort to present cars in ‘ready-to-retail’ condition. Woodward reports that CD Auction Group’s on-site repair and refurbishment service is “packed”.

“Because the buyers are being fussy, it’s worth spending some time on refurbishment,” he says. “But don’t fall into the trap of over-preparation.”

“There’s no point in painting a whole panel when a quick polish will do. At CD Auction Group we offer a bespoke smart repair service, not a fixed menu, which means we only do the work that is really needed and it’s not costing the trade more than it has to.”