Reconditioning work is the biggest delaying factor in getting a vehicle on sale according to 85% of dealers.
The results of Manheim’s latest dealer sentiment survey show that 42% of dealers said that it takes an average of 3-4 days to list a newly-sourced vehicle, while just under a quarter reported an average of 5-6 days.
The results come at a time when high demand for stock is leading to strong competition in the wholesale market, and some dealers are choosing to upgrade lower condition vehicles rather than pay top-price for ready-to-retail stock.
Philip Nothard, customer insight and strategy director for Manheim, explained: “We know that margins are under pressure, with almost half (48%) of the dealers we surveyed reporting a year-on-year margin decline.
“These pressures, coupled with a competitive wholesale market, mean that retailers are managing costs extremely carefully. One strategy is to buy lower grade vehicles, or keep hold of part-exchange stock and recondition it before putting it on sale.
“Reconditioning can reduce the initial outlay for a dealer, but there are hidden costs in the potential impact on time to sell.
“The key to margin gain for dealers is to be fully aware of the impact that longer preparation times can have, so they can take steps to reduce the impact on ROI wherever possible.”