Vroom and Gloom!

When you think about the automotive sector currently, the first phrase that comes to mind is ‘doom and gloom’. But…. does it have to be like that?

I’m going to share a customers journey with me over the last week or so. Let me know your thoughts!

Firstly though, I just wanted to thank our sponsor of this edition of my weekly newsletter! Carfish! The exclusive car buyers!

“Mr Customer, your car has dropped in price by £4,450! But that is a good thing!”

This is something I didn’t think I would be saying to one of my customers, and obviously the fact that the value of his car had decreased by such a large amount wasn’t a good thing, BUT…. in his particular situation it wasn’t as bad as it could’ve been.

The car in question is a 2018/68 Land Rover Discovery with 30,000 miles on the clock. After speaking to the customer and evaluating the market on the 17th November, I offered £26,000 to buy the car. The reason he was selling is because his insurance was up for renewal and wanted to come away from JLR product.

When valuing a vehicle, many buyers work differently and have certain buying criteria, but for me I look at a system called CAP that most dealers have access to. I use this purely as a guide, and to look for trends in the market, such as values going up or down. The CAP value for this car was £21,600. I was offering £4,400 more than this system was telling me the car was worth.

Another system I use is Dealer Portal with Autotrader. I use this platform particularly for the scoring system they use. Autotrader has a huge amount of data and scores every vehicle out of 100. The higher the score indicates that more people are going an Autotrader and searching for that particular vehicle. The higher the score also indicates the speed that the vehicle will sell, or if you’re a dealer reading this we call it ‘Days To Turn’. The Discovery scored 91/100 which made me want to buy the car even more.

The vehicle was advertised on Autotrader for £28,930, and my offer of £26,000 was around £3,000 less than the customer wanted for the car, and inevitably turned down my offer, which at the time is understandable given the large difference in price, and he had only just listed the vehicle for sale, with me being his first caller.

I pride myself on the value I can offer a customer on their journey when selling their vehicle, and do not apply any pressure to buy the car from them. I research the market, give them my honest and transparent opinion on their cars worth and make them an offer. If the offer is rejected then we part ways, but will always leave the door open for a future chat. If they struggle with the sale my phone is always on, and likewise, I will keep my eye on the market, and if there are any positive changes then I get in touch. This is the case with this customer thirteen days ago!

Between then and now there has been a huge drop in value on their vehicle. So on the CAP system where the price was £21,600. This steadily decreased to £20,150, and then further to £18,750. A staggering £2,850 in thirteen days. For myself and everyone that works in the motortrade this is no surprise, but for people that don’t, it comes as a bit of a shock!

Dealer Portal, as mentioned is the system I use to determine the desirability of the vehicle with a score out of 100. This was a little surprising even for me with the extent of the drop. The Discovery scored 91/100 on that very first phone call. Over the last thirteen days I have seen it nosedive. 81/100 on the 20th, 75/100 on the 22nd, 64/100 on the 24th and then 50/100 on the 28th November.

We had our final conversation regarding the market and how the Discovery had performed over the last thirteen days, and I made a revised offer of £24,000, which was £2,000 less than my original offer. By this time, the customer had found a car that he was interested in buying, and this is where we turned all the doom and gloom in to a little positivity.

He shared the details of the car he was hoping to buy. Now using the same systems I used to value his Discovery, I valued his potential new car the same way. I was able to see the CAP figures, the Dealer Portal score on Autotrader, and the beauty of that system as some of you may know, I am also able to see if a vehicle advertised at a dealership has had any price changes!

GUESS WHAT!!!

The car he had fallen in love with and that he wanted to buy has experienced a similar trajectory! The main findings from the data I had gathered, is that since the dealer that was advertising that particular vehicle had reduced that vehicle by £3,500. Hearing this information left the customer surprised and I could hear a change in his tone which was positive and inquisitive.

I still didn’t buy his Discovery!!!

What did happen though, is the customer went and bought that car from the dealership, happy that he was getting a good deal. He lowered his price on Autotrader for his Discovery from £28,930 to £25,900 and has now sold that car privately.

I didn’t buy the Discovery, but I did receive a call from the customer genuinely thanking me for my time, my advise and patience with him. And for me, i’ll take that. I’ve genuinely navigated my customer through a time that was stressful and daunting for him, and made him feel like he has had a win!

The market is tough! Prices have been going down! BUT…. the information I urge you to take away from this, is that if the price is going down on the vehicle you are trying to sell, then I assure you the value of the car you want to buy is doing exactly the same.

If you are in the process of selling your vehicle now, and do not want to buy a replacement vehicle, then I feel your pain, it’s a very tough climate at the minute but I urge you to get in touch with me….. I might be able to help!

Now for some Positive news!

Generous used car dealers raised more than £5,000 in memory of one of their own, Dan Kirby, who tragically died earlier this year!

At Monday’s Used Car Awards, a charity raffle was held in aid of the automotive industry BEN in memory of Dan which raised £5,024.98.

Dan’s business, Trade Price Cars won the Used Car Dealership of the year in the ‘over 100 cars’ category at Used Car Dealer Awards in 2021 hosted by Mike Brewer!

Anyone in the motortrade who is suffering with mental health can contact Ben for help, and the money raised will go a long way!

IMDA Founder Umesh Samani scoops ‘Lifetime Achievement’ honour at Used Car Awards.

The Independent Motor Dealers Association founder drew rapturous applause from the hundreds of attendees at the event, held at The Brewery in London, as he went up to collect his award from Adrian Wilmore, group director of UK sales for category sponsor GardX.

Umesh has been running his business for nearly 30 years! He has collected numerous accolades from the awards in the last decade, in particular for his customer care and social media.

BUT…. it’s his commitment to helping other independent used car dealers that really stands out! He has helped hundreds of like minded used car dealers come together and share their experiences and support each other.

Umesh wasn’t expecting any awards at the event, but thoroughly deserves this one. Although I have only seen the work he does from afar, I have huge respect for his achievements and is definitely someone I look up to in the industry!

We’re going to end it there folks! See you next Friday!