Used Car Sales Margins Drop


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Those working in the motor trade often experience highs and lows, and right now, like many industries, this sector is under pressure. Whilst this is bad news for those working in the industry, it is good news for the customers, who are enjoying great offers and incentives encouraging them to invest in a new car. This, in turn, is having a knock-on effect on the used car sale market.

Finance Marketing

Very few customers buy a car outright with cash, so new car dealerships are putting an emphasis on offering competitive finance deals, with many showrooms using this in their marketing campaigns to promote buying a new car in preference to used.

Some showrooms are using interactive tools in the showroom to demonstrate the affordability of a new car, which means potential clients can do their finance research while still in the showroom.

Last year saw 86 million new car sales around the world, which sounds impressive but is below what was forecast and car sales appears to have reached their peak.

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Used Car Sales Margins Drop

The Market

There are many reasons why new and used car sales appear to be suffering. There is the uncertainty of Brexit, which is causing a lack of consumer confidence, and combined with potential redundancies in certain sectors, many people are holding on to their cash and making do with the vehicle they already own.

As predicted by many experts in the industry, used diesel vehicle sales are decreasing, while sales of petrol cars are increasing. Next month sees the introduction of the new vehicle emission zone, which will again hit the pockets of the driver.

Insurance costs are also a factor. With costs rising, many people can’t afford to upgrade their vehicles because of the associated increase in their insurance costs. For drivers looking for motor trade insurance and wondering what does motor trade insurance cost, they can access the most competitive rates here.

Benefits of Used Cars

The benefit of getting a used car is the flexibility to negotiate. This means consumers are able to pick up a good deal and end up with a higher-spec vehicle than they initially planned. However, this is also having a knock-on effect on the industry, as it reduces the profit margins, which then affects businesses and increases the pressure on owners and their staff.

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