Thursday, 9 October 2008

Cars that are unwanted on dealer forecourts (UK)


The last post brings us swiftly onto this post. What UK dealers will accept and won't accept in part exchange/trade in offers. Because of the credit crunch, dealers are now being very picky with what they are accepting

Obviously, petrol SUVs are a no-no because of the depreciation they face. Part of the problem is a shortage of underwriters. These middlemen normally guarantee trade-ins, and typically match franchise dealers with car traders to move on vehicles from a different marque to the one they sell. Sometimes, a lack of underwritten offers means no trade-in price is given at all.

But during the course of aninvestigation, it was discovered it’s not only high-performance sports cars or gas-guzzlers which can’t find homes. Perfectly usable mid-range models are being shunned, too.

Mercedes R-Class:

This outsized people carrier is proving to be one of the biggest millstones on forecourts, as it drops out of fashion. “People just don’t want them,” said the used car buyer at dealer A – a Mercedes showroom in the Home Counties. “Sure, this is mainly down to running costs. But it’s also unacceptable now to show that you ‘don’t care’ [about the environment] by driving one.

“It’s no longer trendy to ignore the green issue. And this means the situation is just as bad for the M-Class and GL-Class.” Our man told us he would buy these cars today only if a customer specifically wanted one.

“It’s a shame for people who bought them, because the depreciation is just horrendous. I think the industry is still trying to deny there’s a glut, but around half of these cars you’ll see at dealers are ex-demonstrators. Buyers are far more pragmatic these days.”

Hyundai Coupé 2.0:

We felt a shudder at the mention of 4x4s when we spoke to dealer B, who worked for a Berkshire SEAT showroom. “SUVs are a no-no, irrespective of make,” he said. “Although the Toyota RAV4 is still selling.”

But even an apparently inoffensive Korean car is unwanted: don’t turn up at this site if you want a good trade-in for your Hyundai Coupé 2.0 against a new Leon or Altea. “The problem is that it has a thirsty 2.0-litre petrol engine and attracts £210 in car tax,” our source continued.

“I had real trouble finding a Hyundai dealer which was prepared to take it off my hands. I think the figures quoted by the price guides are behind the times – you can knock £1,000 off what they value this car at.”

Range Rover:

No matter how practical or desirable they are, vehicles with large-capacity petrol engines are failing to find what the trade calls ‘full value’ interest – even in the specialist car world.

We talked to dealer C – a salesman at a Morgan franchise in the south-east of England – who described his attempts to offload a late model Range Rover V8 as “very difficult”. And he told us he doesn’t want to see its like on his forecourt again. “The 4x4 area is very precarious,” he explained. “Unless you need one for your farm, it’s just a gas-guzzler that you don’t look clever in any more.

“Also, I think people in London have been put off by the possibility of huge congestion charges. Although I know that threat has now gone, motorists have really questioned why they need to be driving round in one.

“I wouldn’t want to be stuck with an Audi S6 Avant, either; I know someone who’s just bought a 2.0-litre version of the A6 and is far more happy in that.”

He also maintained that, while a Morgan Aero 8 has a niche appeal and a long waiting list, the Bentley Continental GT has been a victim of its own success. “There are a lot of them on the road because they have been very popular new. I know of one Continental GT that was on a forecourt at £89,000, but went for £59,950 in the end. With the price realigned, that was good value – and that’s what the used market always responds to.”

Porsche Boxster:

Our fourth trader, dealer D, is at the sharp end of the car trade. He works at a north London outlet, the former holder of a Mazda franchise. It has 90 second-hand vehicles on display, but only a few specific models moving. He told us he can sell nearly every VW Golf and Polo he can get hold of. Yet even though the site is in a wealthy area, prestige vehicles are gathering dust.

“We have a couple of Porsches that are just not selling,” he said. “I think the 911 GT3 will go, but not the Boxster. I won’t buy another.”

He added that he avoids anything with an engine of more than 2.0 litres, or 4x4s.

“We had trouble shifting a Merc SL and BMW 7-Series. A Honda Accord 2.2 diesel would sell as it has low emissions. I’d buy any number of those cars, but not the 2.0 petrol version.”

BMW 3-Series Coupé:

Even in one of the supposed bright spots of Britain’s credit-crunched economy, the outlook is grim for premium brands. The Scottish oil city of Aberdeen is supposed to be awash with champagne, cash and horsepower. But one local showroom – dealer E – relates the sorry tale of a BMW no customer would touch.

“I was offered the car, a really nice 320i SE Coupé with only 2,700 miles,” a member of staff at the city’s Smart franchise told us. “It’s a £26,000 vehicle new, supposedly very desirable, but I had to ring round 15 dealers before I finally got an offer of £18,000.”

According to the trader, this is typical of the problems of getting trade-in cars underwritten:

“Any 4x4 or SUV is a huge problem.” But while the outlet is selling 15 Smarts every month and buyers will take any colour, customers are steering clear of the R, M and GL-Class in the adjacent Mercedes showroom. “They’re just hard to sell,” our source said with a sigh.

BMW M6 Convertible:

“The M6 Convertible wouldn’t be a car we’d write a cheque for at any price,” was the blunt verdict of Simon Gregg, one of the few dealers we spoke to who agreed to be quoted directly. His company, Bramley, based near Guildford in Surrey, doesn’t have a franchise for which he must save face. Then again, he is in the tricky business of maintaining turnover of models priced from £25,000-£140,000 in tough economic times.

“Really, we might as well cancel our subscription to the price guides because the bottom book price in there is generally the retail price today, maybe with a couple of grand on top,” he added.

“Main dealers are undercutting at any cost – you only have to go online to see that. So we have to offer genuine value for money.” He said it’s unfortunate for vehicles in anything less than perfect condition, or with the wrong specification.

“I was offered a Porsche Cayman S the other day,” Simon added. “It was an 800-mile 07-plate car with a Sport pack. But there was no sat-nav, so I didn’t want to buy it. The owner was incredulous.”

Jeep Grand Cherokee:

The salesman at the Wiltshire Vauxhall franchise we spoke to – dealer F – is too polite to put up the shutters to a customer wanting to part-ex a big, powerful SUV. But the owner should be prepared for a shock when a trade-in value is quoted.

“Take the Jeep Grand Cherokee,” he said. “Obviously, the V8 petrol cars are impossible to sell. But even the diesels struggle – you’d have trouble getting anyone to price them at all. We’d take it in, but at a figure that would be, I’m sure, way below the seller’s expectations.”

He cites another formerly desirable SUV, the Nissan Murano, for which offers fell by £2,000 in one week alone. “People need to be realistic,” our man added. “There’s panic around.”

Land Rover Freelander Leicestershire Suzuki dealer Darren Gudgeon was another of the very few sales staff we spoke to in our research who was happy to go on the record.

“We’ve had many people wanting to trade down to the SX4 and even the Swift from bigger 4x4s,” he explained. “And they don’t seem bothered about the part-ex price; they’re much more interested in the running costs over the next two, three, even four years. “But the Land Rover Freelander is the biggest issue for me. I’ve got three on my patch at the moment, and you just can’t get them underwritten.

“Traders don’t want them, especially the petrol models, and I understand that the Land Rover main dealer network has a glut of stock. There’s just too much of the ‘lumpy’ stuff about.”

Nissan 350Z:

Most driving enthusiasts would agree that the Nissan 350Z is an attractive choice as a performance car. But its performance on the second-hand market these days is frankly second rate. “I suppose we all get it wrong once in a while,” explained dealer G – a member of staff at a Renault franchise in Bradford, W Yorks. They had taken a 350Z in as a part-exchange – and they never want to see another one.

“We’re stuck with it now,” our source added. “That 3.5-litre V6 engine makes it incredibly difficult to shift. We also had terrible problems selling a BMW Z4, although that did eventually go.”

On the other hand, the showroom is doing a roaring trade in petrol Renault models with engine capacities of less than 1.4 litres, as well as 1.5-litre diesels. We were told several deals had been done in recent weeks where two-car families had arrived with both vehicles and driven off the forecourt with a single Scenic.

Conclusion:

Anything that has high emissions, taxtion, engine size and crap fuel economy, dealerships aren't going to accept. Invest in your next car wisely. Diesel supermini's are highly sought after in the UK but don't go mad with the options list.

Via AutoExpress > The Untouchables

2 comments:

Alexis said...

I have a R320 CDI Bluetec and it's a great car to own. As stated above, it lost like half of its value within a few months. I bought mine for around $56,000 after I was given $5k off the list price :(

Laguna said...

Ouch! I guessing similar cars aren't wanted in U.S forecourts?

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