Almost half of dealers (47%) believe that staff costs will be the biggest factor affecting their business in 2024.
That’s the conclusion of the January Startline Used Car Tracker which showed car retailers were also worried by the cost of premises (33%) and the potential for used car sales to fall (33%).
Other concerns mentioned include higher stocking costs (30%), higher vehicle preparation costs (27%) and higher advertising costs (22%).
Paul Burgess, CEO at Startline Motor Finance, said: “Dealers have found themselves in a situation in recent times where all kinds of unavoidable costs – from premises to advertising – have been rising and often quite substantially.
“However, it is still noteworthy that the cost of staffing is by far the biggest factor mentioned in our research. Anecdotally, we know dealers have been having to pay more for staff and that recruitment is an issue.
“This is something that has affected nearly all businesses although there is some evidence that wage increases in the overall economy are beginning to soften.
“Further rises remain likely and together with the rising costs that they cite in several areas, alongside the possibility of generally falling used car sales, there is potential for margin erosion.”
Some dealers are also worried about falling income from servicing (15%) and aftersales (10%), the Startline Used Car Tracker showed.