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TRADERS are downgrading the condition of stock they would normally buy for retail, according to the Vehicle Remarketing Association.

The Association said there are widespread reports 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 a saleable condition.

VRA chairman Glenn Sturley said: “Stock shortages – and subsequently high prices – have reached a point where many traders simply cannot get hold of the stock in the condition they want.

“The compromise they are making is to buy vehicles in poorer condition and then invest in making them suitable for their forecourts. Many buyers will inevitably be nervous of this shift.

“The challenge of accurately estimating repair costs through a visual inspection intensifies with the more attention that the vehicle requires.”

Sturley added that the flip side is when competition for the best vehicles is so high, vendors stand to more than recoup their costs if they improve the condition of vehicles before moving them on.

“What this also means is the general condition of the used car parc is being raised by a degree.”

Sturley said 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.

“A large number of traders won’t go below grade three because, at that point, the cost of bringing a car up to retail condition can be prohibitive. The possibility of making a profit becomes even more of a gamble.

“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.”

 

 

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