As Brexit negotiations become ever more entangled and extended, uncertainty continues to rise which potentially is helping the used car market.
With New car sales falling, the used car market is holding steady with many believing that with Brexit uncertainty looming, buying a new car is too risky. With unknown factors at play such as manufacturer tariffs after the UK leaves, is this a cause to hold off new car orders?
Brexit and the Motor Trade
Since the 2016 vote, there has been huge levels of uncertainty that have steadily grown with many overseas manufacturers announcing they need clarification on manufacturing laws and regulations within the industry. Other companies such as Nissan and Jaguar Land Rover have also announced cutting jobs on the basis that manufacturing parts than trading outside the UK has little benefit. New car sales have dropped by 20% with diesels car sales plummeting an extra 15% to see a 35% decrease.
The effect has helped towards the used car market retain a steady position as people look for a used vehicle over a new one. An additional benefit could also be that importing premium brand cars such as BMW and Audi into the UK could carry higher tariffs which is bad for the first buyer, but when going for resale, these costs although harsh on the original buyer and garage have been absorbed and the second-hand buyer avoids them as well as the depreciation factor. This could see German cars for instance hold better value for money in the used car market
Does it affect me as a motor trader?
It’s never been a better time to work within the used motor trade market. Many part time traders are seeing huge success from their small enterprises. With people moving away from new cars it means there is more demand on used cars.
There are many advantages to buying a used vehicle such as obvious ones like price. But with cars becoming more and more reliable, the reliability factor is also increasing within the used car market and consumers feel more secure in buying a second-hand car.
Making the most of the used car market
The 1st rule to any business is make sure there is demand! If you are a used car retailer, then only buy cars to sell where there is demand. Popular models to buy are Ford’s with the Ford Fiesta relentlessly dominating the top best-selling second hand cars.
Also choosing to buy and sell Vauxhalls Corsa’s, Vauxhall Astra’s, Volkswagen Golfs will also be a smart choice. Don’t be scared to stock the BMW 3 Series either, although a more expensive car buy, there is always plenty of demand for German built cars.
Insure that you have proper insurance in place to protect your buyers and help them feel comforted in choosing to buy from you.