Empower Your Business to Close More Sales in United Kingdom

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how bad is the used car market right now I'm a used car dealer in the UK and primarily 90% of my business is dealing in sub 5,000 affordable and practical cars the other 10% comes from Sports and Classics things have changed a lot recently and the car market is definitely getting tough for us car dealers bills mortgages day-to-day costs have really rocketed the car trade is like going on a roller coaster you're up and down as the ride takes you and being in the business and speaking with others in the trade things seem to be quieter for many other dealers at the moment so how bad is the car market right now well it's not looking great shall I say it's definitely slowed down we all know that I think a lot of car dealers will say the same thing it's definitely quiet down but that's an overall picture but let's get into the specifics of what has caused this to happen and obviously where do we see things going moving forward so let's start with some of those causes first thing is the season R in now we're going into summer holidays kids are breaking up from school people tend to save up a bit of cash so they can go away whilst the kids have got school holidays so that's known every year it's commonly known that the summer season can be more quiet for the reason kids are off school people go on holiday but I don't think this is the most significant reason to why things have slowed down it's just a part of it because it's something which happens every year as a car dealer you can almost prepare for it because you know it's coming you can adjust your stock levels maybe not buy as much or you know have more cash reserves in the bank for this reason so it's something which you can't prepare for it's definitely an element to why things are quieter but I don't think it's the main point but that's the first point I wanted to mention the next point something I've spoken about before is definitely the cost of living crisis now I know it's been going on for a long time but things are expensive we've done God knows how many years worth of inflation in the space of probably 12 months things are a lot more expensive than what they should be prices don't come back down this is the new Norm when inflation happens cuz inflation happens every year it it's part of the economy it's normal to see you know a couple of perent a year but the rate that we've been doing it's literally like we've jumped four or 5 years so cost of living is very very high people have less disposable income meaning they're not going to have as much money to spend on a new car so again it's really black and why people have less money they're less likely to upgraded car so that is the second point to why I think things are starting to slow down the third point is interest rates now interest rates don't necessarily have a major impact on the cheap side of the car market it does tend to offend more than you know 10 grand 20 grand 50 Grand 100 Grand right because you're borrowing money to buy these cars which means if the interest rates are high which you know if you're looking to get a rate now from the main dealer you're probably paying around anywhere between 10 to 14% you go to a broker maybe you get a bit low maybe 8.9 but compared to what the rates used to be 3 4 5 years ago it's a lot higher and if you think if you're buying a car for 20 grand and taking on finance you're going to be paying a lot lot more money on interest rates compared to what you would have been a couple of years ago so that is another reason why the car market has slowed down and if we do look at the cheaper end of the spectrum people may take out a bank loan to finance their car because interest is higher it means their monthly payments are higher so what that means in the real world is they've got less money to spend on their new car all of these things trickle down and end up having an impact and it's what we're seeing now car market has slowed down prices have fallen some of you will say it's not prices crashing it's more of a correction you are right to some extent obviously if prices were inflated ridiculously through covid and we're starting to see things come back to where they should be but the way it's happened is so fast you know the last 12 months people have lost crazy amount of money on cars you look at the Range Rovers the brand new one 12 months ago you couldn't even get them less than 100 Grand now the cheapest one on auto trader is sub £70,000 that's lost 30 Grand in a year svrs again 2030 Grand in the last 12 months EVS have lost a ridiculous ous amount of money as well so that's just a few examples I'm giving you but trying to not get sidetracked with really focusing on the cheaper end of the market here but the impact it has had is cars aren't selling as fast as what they used to even on the cheaper end now the next point is linked to interest rates as well mortgage rates now a lot of people do have a mortgage some people rent of course but a lot of people have a mortgage rates have changed interest rates are higher so you know you've come off your fix rate mortgage now after 2 years 3 years or 5 years or whatever it is a lot of people are coming off those cheap fix rates and going on to the new ones which obviously are a lot higher than what you probably would have been paying meaning your biggest outgoing for most people which is a mortgage is now going to be a lot more expensive which ultimately means You' got less disposable income you're going to have to budget differently if you are buying a car if your mortgage has gone up by £500 a month that's the difference between you financing a brand new car or you know having to just buy a cheap car for a grand cash because you don't have the budget to do so and in this country a lot of people do live month to month whether you're on a small salary or even on a big salary I think the average savings that a 45-year-old has in this country is like three or four grand don't hold me to it it's just something which I saw but it gives you an idea of how expensive things are in this country regardless of what sort of salaries you're on so that's that point now the last point is to do with the current affairs we've obviously just gone through elections obviously new prime minister has been elected so the lead up to this for like the last 3 months or so should I say does cause uncertainty in the economy if people aren't sure of what's going to happen when you know a new government comes in or how things are going to look over the next couple years people are naturally more cautious with their spending now that goes with buying houses or buying cars or whatever it may be just with big purchases they're going to be more cautious because depending on what party comes in to run the government will have an impact on where they see you know the future for them so we've got a new government labor comeing into power so there ultimately are going to be some changes in the economy so there still will be a little bit of uncertainty because it's something new we don't know what's going to happen but it's better than what it was before because before an election a lot of people will naturally hold back until someone has been elected because then you've got a bit more of an idea moving forward what's going to happen with the economies But ultimately I do think you know interest rates mortgages people not having the same disposable income is a big big factor for why we're seeing the decline in the used car market and why things have slowed down but collectively the points which I've spoken about collect L all add up and really will have a negative impact and we're seeing it now things have slowed down it's no secret you can speak to car dealers it has slow down you still will get the odd few car dealers who are massively established have a big client base return business or specialized and Niche cars who will still be thriving that's more generally seen at the really really top end you know high-end supercars Ferraris lambin at the top top end because it's a different bracket that of course it's still affected but it's a different type of business so they still may be doing better than others but I'm speaking more just for your general day-to-day cars but as a whole businesses are finding things very very tough not even just in the car market you speak to small independent business owners things are a lot more tougher at the moment rent expensive bills have gone up if you're a car dealer you know mechanic prices have gone up parts are more expensive body work is very expensive Body Work used to be much more affordable you can get panels painted for1 £150 now if you want to get a panel painted on a car you're pay pay the best part of £400 to get it done I'm sure you probably can find a guy who will paint it in his garage for £100 but what I'm saying is everyone's costs have gone up meaning when they are business their product or whatever they're doing that has to increase as well so it's all just trickling down and impacting everyone in a bit of a negative way and honestly I do think at the moment where it's known across the board where you know car deers have slowed down only the toughest Will Survive you know it's about keeping a head above water now only the toughest will get through this and survive and you are going to probably see dealers closed down or definitely change the way they're doing their business maybe downsize funny enough I spoke to someone the other day from Leicester who has a car dealership with 100 cars and he was saying it's been dead since August for him and and he's thinking of downsizing to just 20 cars because it's just not for him he doesn't see you know the return for the amount of money things are costing him you know I dread to think what his Auto Trade A bill is with 100 cars but and if that guyy is struggling from 100 cars and thinking of downsizing to 20 it tells you a lot and other dealers who I don't know you know it's quite commonly known that they've changed their way they run their business they've downsized they've got rid of their showroom operating from a small unit where they just do a Handover because they sell a lot of cars virtually and online so they're just keeping their cost low it's what people are having to do now they having to change and adapt to just survive and with all of those points I'm talking about well it just means that your margins have become Tighter and if you want to stay competitive in this market you need to have your car priced correctly so margins are shrinking meaning you're not making as much money on the car and taking or more risk in doing so so it's just something you got to think about so where do I see things going with the used car market moving into the future well it's early days it's hard to say exactly what's going to happen because if you think about it A lot's happened in the economy we've got a new government and that is the biggest thing which is going to impact how things are in the economy moving forward so what I'd like to see is a bit of a boost in the economy gives it some confidence and that'll allow people to start spending more money because if people feel more confident and have some you know a bit of faith in the economy and think that things are on the up naturally people are going to spend more money that's what we do if the government says things are okay people spend money if the government says things aren't great we hold back and keep money safe so I would like to see a bit of confidence and a bit of a boost in the economy if that happens people will spend more money and that will start to trickle through the system because ultimately it's a flow you know the money needs to go around a system for people to be making money if people aren't spending then you're not going to be able to make any money so that's what I'd like to see happen it is very early to say what will happen but what I will do for sure is again I do this quarterly in the next quarter in 3 months time I'll do an update to show how things have gone in the car market since have we seen any change have things got better or have they got worse so if you do want to stay tuned for that information make sure you subscribe to the channel now hit that like button and comment Down Below guys if you do think anything differently or if you've got your opinion on where you see the market going just comment Down Below guys and let me know what your thoughts cuz I'll be interested to see it's more of a debate this is there is no right or wrong necessarily at this point but other than that guys I hope you've enjoyed today's video hopefully it's been a bit of an insight into the used car market and with how things are in the current affairs so hopefully that's come through on today's video and giving you a good Insight I hope you've enjoyed this one thank you so much again for watching and I'm going to see you on the next one take care guys [Music]