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Used car shortages causing dealers to turn to poorer vehicles

Dealers are settling for lower-grade vehicles and investing in remarketing to make up for used car stock shortages.

Cars in storage

The VRA says traders are turning to lower-condition vehicles to compensate for used car stock shortages

According to the Vehicle Remarketing Association, reports are widespread of traders who would normally only acquire grade one or two cars settling for grade three and then spending money to bring them up to the desired condition.

Glenn Sturley, chair at the VRA, said this means that the general condition of the used car parc is being raised by a degree.

“Instead of grade three vehicles being bought and sold as grade three vehicles, their condition is being improved, so customers are generally being given access to better quality used cars,” he continued.

Sturley added that the trend was also leading to an increase in demand for vehicles in grade three condition, and that a greater gap in trade values was potentially emerging between the top three grades and the bottom two.

“However, with factors such as Brexit and general economic uncertainty causing consumer confidence to falter, we expect to see the used car market continue to remain buoyant in comparison to the new sector well into 2019,” he continued.

“Certainly, there is no reason to expect that the current, high used car prices will fall, so the trade will continue to have to adopt strategies such as buying poorer vehicles and upgrading them for the foreseeable future.”

His comments come as Shoreham Vehicle Auctions warned that dealers are increasingly turning to used cars to fill gaps on forecourts due to new car shortages from WLTP testing challenges.

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.