Used cars to outstrip new in 2012

More than a third of dealers expect used car
prices to rise in 2012, and almost a quarter expect an improvement
in their margins, according to a survey by automotive services
company Manheim.

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Manheim says its survey suggested the used
vehicle sector was likely to outperform the new vehicle sector in
2012, having done so in 2011.

Respondents also identified finance and
insurance as one of the top five areas of opportunity for motor
finance in 2012.

Of the 5,000 franchised and independent
dealers surveyed, 78% believed that used car sales would improve or
remain stable and 65% believed that their margins would improve or
remain stable in the coming year.

Respondents’ top five challenges for 2012
are:

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  • Sourcing stock
  • Finding customers
  • Buyer confidence
  • Cutting costs and squeezing margins
  • Cash flow

Respondents’ top five opportunities for 2012
are:

  • Selling more used vehicles
  • Diversification
  • Entering new markets
  • Income from finance, insurance and extras
  • Less competition and takeover opportunities

Of those surveyed, 52% saw a drop, and 15% saw
an improvement, in margins in 2011; 43% saw a decrease, and 27% saw
an increase, in used car sales.

Of dealers surveyed in the new car market, 23%
saw an increase, and 51% saw a drop, in sales. Just over a third
expected a further decrease in 2012 while just under a third
expected a rise in sales.

A collection of car finance industry
predictions for the year ahead will be published in January’s issue
of Motor Finance magazine.

richard.brown@vrlfinancialnews.com