::Barloworld ::Pre-owned vehicles sale gets rid of the slow movers
The pre-owned vehicles sale has perhaps become a lot more prominent in an industry faced with very high stock levels. Over and above consumers selling their cars on the used market through all the available channels, the national used car parking lot is being supplemented to the tune of over 7 000 units per month due to the disturbing rate of repossessions by all the major banks and finance institutions.
Used cars are entering the system faster than dealers can dispose of them and this has the inevitable effect of reducing the prices that can be asked for these cars. It becomes a buyer’s market; the only problem is that the buyers, battered by the credit crunch, inflation and high interest rates, are not buying from a pre-owned vehicles sale.
Therefore, we see more and more advertisements for almost-new used cars and demonstration models going for a song “while stocks last”. Dealers from such a pre-owned vehicles sale are selling these cars at little more than they had paid for them, rather than risking them not being sold within a month or two and hogging their available cash while costing them interest on it. Cars with low mileages and in excellent condition are often sold for 10% or more under Book value and the buyer that happened to in the right place at the right time struck a deal that would be discussed with friends at Poker evenings for months.
That the dealer made little money off these sales often matter little as they breathe a sigh of relief for getting rid of slow movers, to replace them with more popular models that sell better. High volume, low margin is still better business than a handsome potential profit but no sale at all!
Many dealers have little choice in the cars they end up having to sell. Frequently, a fleet replaces a hoard of vehicles and, to make the sale, the dealer accepts the undesirable trade-ins in order to sell all those new cars. These trade-ins end up at the pre-owned vehicles sale at a steal, “while stocks last”.
