Pressure on used car margins driving more dealers to online stock acquisition

Increased pressure on used car margins is driving more dealers to buy stock online during 2018, reports epyx.

 

Vicky Gardner

 

The company says that the relative efficiency of online acquisition compared to physical auctions – speed, low cost and productive use of employee time – are all playing a part in the trend.

Vicky Gardner, head of Remarketing at epyx, explained: “The swing to online is a development that has been underway for many years but, once in a while, it is possible to identify an acceleration and we believe that the market has arrived at one of those points.

“While the used car and van sectors remain buoyant, it is no secret that margins are under pressure and that dealers are therefore seeking efficiency gains. Buying online is an easy gain and the platforms and choice of stock available are improving all the time.

“Certainly, we have seen a jump in activity in 2018 compared to the previous year – volumes through our 1link Disposal Network platform are up something like 15% increase 17 to 18 YOY. While we believe that this figure is beating the overall market increase for online sales, it is probable that our competitors are also seeing considerable rises.”

Rob added that a further factor powering the trend was that more manufacturers and leasing companies were disposing of increasing volumes of stock online to dealers.

“Certainly, some leasing companies have increased the amount of stock they sell online by multiples in the last 2-3 years and this is also changing dealer behaviour. Generally, the better stock is online.

“The advantages for the vendor in this situation are obvious. The cost of disposal is much lower and the speed of liquefying the asset is much faster. There is literally no downside.

“Our view for many years has been that physical auctions will continue to hold a key place for many dealers because they allow them to retain a ‘feel’ for the market that is difficult to achieve through any other medium.

“However, there is no reason not to expect the ongoing trend towards more online acquisition to continue. It is even possible, depending on medium-term economic factors such as Brexit, that we will see it accelerate.”

1link Disposal Network is one of the longest-established sources of trade stock in the UK, offering a large selection of stock from major leasing companies, motor manufacturers and more.