“A dealer offered £1200 more than his PCP was worth”
In September, new car registrations fell by 25% compared with last year. Disbelieve those figures if you like, but certainly the stock in auctions is down considerably. While I’m not going to speculate on why the sales have fallen – there are numerous theories, but the answer is probably a combination of all of them – used cars prices are rising rapidly.
One broker I know is buying stock in auctions at retail prices, then adding his commission on top. Quite how the dealer is expected to take money out of that, I’m not sure, but expect to be laughed out of a showroom if you’re a cash buyer.
A major PLC outfit has abandoned their ‘cheapest on the internet’ price promise as their used stock levels are down by several thousand units. However, due to the increase in residuals, the money being made on what they are selling is actually the same. My master technician has used this situation to his benefit. Eighteen months ago, he took out a PCP on a Ford Focus 1.5 petrol as the offer was too good to be true. Another dealer, desperate for such desirable and unobtainable stock, offered him £1200 more than his PCP settlement was worth to get him out of it six months early. So he took out a PCP on a brandnew diesel Qashqai for pennies more than the Focus had been costing him and he’ll save the difference on fuel economy. It’s the first time I’ve heard of people making serious money out of PCPS, but such is the market at the moment.
If you’re savvy and can read what’s hot, what’s not and what’s about to be, then take out a PCP on something new. Just don’t gamble the mortgage on it.