Dealers prefer to buy lower price used cars at physical auctions reports SVA
Dealers are bidding on cheaper lower grade used cars at physical rather than online auctions according to Shoreham Vehicle Auctions (SVA).
Surveying buyers during its 60th birthday week of sales they admitted the buoyant used market was forcing them to buy lower price NAMA grade 3, 4 and 5 cars with a view to refurbishing or reconditioning them.
Many buyers admitted to only buying this type of used car when they can see, feel it, and touch it as a 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.
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.
“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 were dealing with this extremely hot used car market,” explained Alex Wright, SVA’s MD.
“Many admitted to many 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 have buying physically to avoid the risk of buying a damaged car without seeing it first,” he added.
SVA is welcoming many of these small independent dealers to its Monday night part exchange and finance and Thursday fleet sales as they look to secure used cars out of the scope of buyers from franchised dealers.
“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 the stock they buy physically. Online only auctions don’t work for this profile of buyer,” he added.