Half way through the month, and the new car market looks to be on track for a record September tally of 450,000 units. Experts at Auto Trader are also forecasting a record volume of consumer valuations via its site, with more than 1.2 million taking place in the month.
But while signs look positive, the company has warned of research which suggests a significant proportion of showroom deals could break down during part exchange negotiations. While nine in ten walk-in buyers have an expectation of what their part-ex is worth, 18% of deals fall through at the part-ex negotiation stage.
“September is gearing up to be another bumper plate change month for retailers,” commented Karolina Edwards-Smajda Auto Trader, Director Retailer & Consumer Products.. “But it is surprising that so many deals break down in the showroom, often as a consequence of difficulties with price negotiations. Unrealistic expectations about the value of a part exchange are cited by retailers as one of the most common reasons for this failure.
“We are currently working on a product that could help buyers and sellers start a conversation on the same page. If we can help facilitate a dialogue on part exchange values earlier in the process, when buyers are seeking information online, then we could help both parties align before the visit to the showroom. That could significantly reduce the haggle-hassle factor on the forecourt and seal more deals.”
Consumers have myriad of sources with which to value their cars today, but more than a million a month are now being undertaken via Auto Trader. Valuations are based on a retail-back approach which means the starting point is what cars are actually selling for on forecourts throughout the UK. These are then adjusted for trade to ensure buyers get a fair price – and that retailers make a fair profit.