CONFIDENCE among independent used car dealers is continuing to slide, according to the used car valuation experts, CAP Automotive.
One of the problems they face is increasing difficulty in sourcing the right kind of cars, as stock levels remain stubbornly low.
A growing number of independents describe current market conditions as tougher than last month and confidence about their immediate future prospects is also showing signs of weakening.
Each month CAP questions a 'Dealer Insight Panel' of more than 100 independent used car dealers. The results give a unique insight into the dynamics of the 'true' used car retail and trade marketplaces. This information assists CAP in its day to day research and is published on the CAP website at cap.co.uk for the benefit of customers who wish to conduct peer comparisons with their own business performance.
The latest results from the panel show a dip in the number of dealers describing current business conditions as ‘stable’ or ‘good’, from 74% to 64% over the course of a month.
There has also been a slip in the number of dealers forecasting business to grow, from 87.5% to 81%.
One of the causes of their waning confidence is a combination of issues around the used car stock that is available in the marketplace. The proportion of dealers describing their existing stock levels as ‘too low’ is stubbornly remaining on the 70% mark.
But in the latest survey the number reporting difficulty in finding the right kind of cars for their retail customers has grown from 32% to 42.7%.
Mike Hind, of CAP, said: “Used car dealers are still enjoying strong retail sales and many have consistently reported growing success over the past few months, so it is important to keep these results in perspective.
“But what they do show is that independents are finding the market more difficult as the year wears on and that they expect things to get tougher.
“Cheap rate finance offers on new cars from franchise dealers are sucking good quality part-exchanges away from independents, which is contributing to their difficulties in sourcing retail-suitable stock.
“Those new car deals are also tempting a lot of motorists away from used cars altogether. This means independents who specialise in more expensive late plate cars are having to work harder to make their own offers more attractive, without the support of manufacturer subsidies on finance.
“Independents are the true barometer of real market conditions and their views on future conditions are rarely far wrong. In this case, their views tie in closely with CAP’s own predictions of a short-term slowdown in the used car market.”