|
I tend to chat with independent dealers when I'm there because I'm genuinely interested in how it all works.
Most seem terrified of the 3 month warranty period. They don't have any insurance or similar that would cover the failure within that 3 months, so it comes out of their own pocket. They can normally reel off a list of cars they won't sell because they have been caught out by one in the past.
As we see on here quite often, there can be quite a strong relationship between how desirable a car is and how likely it is to go wrong. Quite often, that's people trading in something that they know has a problem rather than wanting to spend anything on repairs. It's hard for a trader to refuse a PX, especially if they need a sale, but that could mean they've inherited a problem.
That means that a trader who wants to avoid potential warranty claims can end up with a forecourt full of boring cars, whilst the one that sells a lot of exciting stuff needs all that extra margin to pay for any repairs in the 3 months.
Ultimately, I can't see how anyone can make a decent living out of it. Perhaps I am naive, perhaps I have unrealistic expectations of what a decent living looks like. Any business with relatively small margins and relatively high risks is going to encourage less scrupulous operators, who will be trying to push that risk on to the customer and get a bigger margin.
I think the biggest challenge they have is sourcing stock. I once went to a fairly new (and very bad) trader that had obviously bought a pile of cars at below book value from an auction, painted the tyres and added a chunk of cash on to what they had paid. I test drove three cars. All were knackered and one had an extremely questionable history. Perhaps the 'trick' is to establish a way of sourcing good quality cars, which means most of the warranty risk disappears.
|
