Dealers are bidding on cheaper lower grade used cars at physical rather than online auctions.
According to Shoreham Vehicle Auctions (SVA) the buoyant used market is forcing dealers to buy lower price NAMA grade 3, 4 and 5 cars with a view to refurbishing or reconditioning them.
Smaller independent used cars dealers often run their own workshops and are adept at quickly repairing used cars and getting them onto the forecourt quickly.
Shoreham said that many buyers admitted to only buying this type of used car when they can see, feel it, and touch it as taking the wrong move online could see their profit margin quickly disappear. Even with high grade, multiple pictures available online damage and repairs can be more difficult to price up virtually.
“During our 60th birthday week we saw buyers that we haven’t seen since the start of the pandemic. It was good to listen to feedback from the smaller independent dealers to understand how they are dealing with this extremely hot used car market,” said Alex Wright, SVA’s MD.
“Many admitted to NAMA grade 1 and 2 used cars being out of their price band which has meant bidding on the cheaper used cars that need work as they are confident of being able to add their own value. They are buying physically to avoid the risk of buying a damaged car without seeing it first.
“Smaller dealers are typically using their own cash to replace stock, so they have to be creative. Typically, they run their own workshops and refurbish their own stock. Online only auctions don’t work for this profile of buyer.”