Trading standards officers in Bristol are working with the police in an effort to target the areas where vehicles are regularly being advertised for sale on the side of the road. The crackdown comes after a large number of complaints from residents who are fed-up with the cars being sold illegally from the roadside.
The team have been quick to get into action and have already traced car owners selling this way and asked them to cease their actions. In cases where the owners could not be contacted the cars have had a notice stuck on them warning the seller they were breaking the law. Both the police and trading standards are also warning buyers of possible problems they will face if anything goes wrong with the car. Buyers are advised to only buy from reputable car dealers after receiving many complaints that cars bought from the roadside have been found to have a number of faults, often serious ones.
Lib Dem Cabinet Councillor Guy Poultney is familiar with the problem and said: “Some of the vendors are actually car dealers illegally masquerading as private individuals to escape their legal obligations. These companies are abusing free on-street parking to lower their costs, and undercut legitimate traders. Some cars sold on the road side have previously been written off by motor insurance companies and since repaired, but the customer doesn’t know this and by the time you find out, there’s no comeback.”
Previously sellers were prosecuted if they were found to be selling two or more vehicles on a public highway within 500 metres of each other, but the sellers got round this by spreading them further apart. The issue is a common problem throughout the United Kingdom and some local councils have responded by authorising officers to issue £1,000 fines to those who leave any vehicle for sale on grass verges or main roads.
Despite the economy of the United Kingdom experiencing high inflation last year, the price of second-hand vehicles actually fell by over £100. Latest research by Auto Trader reveals that the price of a used vehicle went from £9,155 in 2010 to £9,018 in 2011.
Although bad news for sellers, those buying probably saw the decrease in the car price cancel out the increase in motor insurance thus leaving the market at a status quo. Prices generally decreased throughout last year until November and December when they had a slight increase. Due to fewer new vehicles being sold in 2009, there are now less three-year-old cars on the market. A reduction in the volume of new to three year old vehicles will more than likely lead to an increase in the price that buyers will pay. Auto Trader feel that the impact of this on dealers will be a “triple-whammy effect” of less consumer demand, less stock coming into the forecourts and when they do, the higher trade prices will eat massively into their profits.
Tim Peake, Auto Trader’s Strategy Director, said: “What’s interesting is that there are clear differences between age segments of vehicles and geographic regions that mean there is more to the headline ‘1.5% annual fall in prices’ than meets the eye. Similar to the housing market, where quite often the price dynamics suggest that there are two parallel markets, driven by a lack of supply in London and much of the South East, so in the UK car market, lack of supply leads to prices of younger vehicles climbing while the rest of the used car market falls.”
Auto Trader’s view of the coming year is a challenging one for dealers and it is predicted that both business and consumer confidence will be subdued. The dealers who will win will be those who seek to trade their way out of the current climate by only buying appropriate stock and using the internet to advertise themselves as online car retailers.
The United Kingdom’s biggest supermarket giant Tesco have sent shockwaves throughout the second-hand car industry after they announced plans to launch their own used motors website.
They hope to have the scheme up and running by the end of the year and they have already held secret negotiations with Motability, who are the country’s biggest ex-fleet car provider. Each year Motability have access to over 550,000 cars when vehicles are returned after the three year lease has come to an end.
Insiders have confirmed that Tesco has been working on the idea for over a year and they have already bought the website address TescoCars.com as they prepare for an assault on the market. However, it’s the partnership with Motability which is causing the most upset in the industry.
All of the cars returned to Motability are sold through their links with 5,000 car dealerships and some even go to independent garages or auction. These cars are then sold on to motorists who will get a motor insurance quote for the vehicle. The entrance of Tesco is worrying for other traders who reckon the supermarket giant will probably want at least 100,000 cars for their scheme to be successful. This they fear will lead to a shortage of used motors for dealerships.
Motability admitted it has been in talks and said “Over recent years, Motability Operations has considered potential partners who could offer an additional outlet and we will continue to do so, although we are unable to comment on ongoing discussions with any specific organisation. Motability Operations reviews any such proposal with the same scrutiny as it would select any supplier, looking to ensure that its suitability is matched to the best interests of the business and our customers.”
This may be great news for buyers as it will mean the supermarket will undercut the dealerships but many businesses are worried they may not survive against a big player like Tesco.