Wave Goodbye To Top Prices For Specialist And High Performance Cars!,,,,,,,

Hold on tight everyone because I predict that for those people looking to dispose of a high performance and/or specialist car, the liquidation landscape is about to become very challenging; in fact what I call the “Market Stagnation Stage” is already hanging over the market.

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The “Market Stagnation Stage” is what I term the period of time before values starting heading south and at quite a pace; and it is caused by a combination of overpriced stock meeting a lack of sales, therefore reducing liquidity within the market. Very similar to what happened during the financial crisis in 2007/2008 when it became impossible to turn assets, (even high performance specialist cars), into cash.

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So why has this happened? Well before answering I think it is important to point out that not all used car markets are effected in the same way or to the same degree; they all operate very differently to each other and some markets still have liquidity. Although prices are beginning to soften, customers are still buying (albeit not in the same volumes) therefore so are the associated businesses.

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These markets are still operating on a more normal basis and in truth, anyone who can run their registration number through an algorithm based valuation website (the likes of We Buy Any Car etc.) is in that market so will still be able to liquidate cars for cash. Albeit they may rue not taking the money on offer a couple of months ago.

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Unfortunately though not everyone has this option and that includes the customers I work with in the disposal of their assets; namely specialist and high performance cars, so what’s the problem? Well in truth there are many, culminating in a lack of confidence and positive sentiment; vital to these markets, in terms of retail activity and the prices being paid for fresh stock.

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Many of you will point out that there is still likely to be a limited supply of new cars this year, (especially as thousands of them are now on the ocean floor, having sunk when their transport ship caught fire), and you would have a point. Sadly though this doesn’t always translate into the used car market, valuations and importantly supply and demand; the key ratio governing the prices being achieved.

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There are also the problems associated with the overheated used car market of the pandemic, the associated once in a lifetime pricing drivers experienced during which, are unwinding; and at a pace.

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In truth I could I discuss many of the factors driving prices down in this sector of the used car market, but I will choose to expand upon just one; the factor at the foundations of the market’s woes. One that you may not be aware of or even considered, along with the serious ramifications for the market, those that are already effecting liquidity in the market, therefore the prices being achieved.

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The Lack Of Expertise Within The Sector!

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And I will focus on this point because this factor, more than anything, will be what brings prices down and renders many cars unsellable until liquidity returns. It is a subject I covered briefly in my recent article written for my Used Car Business Development Blog ; An Evolving Market Will Make Life Challenging For Porsche Owners! ?

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In truth though the problems discussed will adversely affect those owning many marques, those associated with the specialist and high performance market; including Porsche, McLaren, Lamborghini, Maserati, Rolls Royce, Bentley, Aston Martin and manufacturers with established models/ranges selling within the market; including BMW, Mercedes Benz and Audi.

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So where to start? Well firstly let me add some context to what I am about to explore and discuss; context although unbelievable will add clarity. For the last decade manufacturers have not been developing or employing proven used car business development talent; the reasons for this, (as unbelievable as they may sound), are complex and mainly driven by a lack of interest (therefore focus) on the used car market by manufacturers.

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I won’t explore this weighty subject here, anyone interested can follow the links below to some of the associated articles published on my Used Car Business Development Blog. I know it sounds ridiculous but take it from someone who has operated within used car markets for 30 years.

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Do Successful Used Car Professionals Exist For Franchised Dealers?

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A Pivotal Piece Of Used Car Business Development Advice!,,,, And?For Free!

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Unfortunately this lack of used car business development talent is having consequences in the used car market, all of which started during the pandemic. A once in a lifetime used car market, one where market forces were put on hold and when the Government then pumped this market full of free cash. We will not see this market again and unwinding all the hubris associated with this market is going to be challenging.

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During this market under experienced used car professionals got taken in by all the hubris, listening to under qualified people, those compiling inaccurate trade valuation guides, those running auction houses and those employed at advertising portals like Autotrader. This resulted in used car stock being purchased at ridiculous prices; with no evidence that consumers were purchasing cars at these over inflated prices, sometimes new list price and/or over list price.

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The end result being caused by panic; because they didn’t have the skills required to have secured used car stock holdings in advance of the pandemic and via more profitable acquisitions methods, they failed to read the market and adjust strategies of investment accordingly.

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Now I won’t expand upon this complex issue anymore however, unfortunately many franchised dealers still have this stock, (in many cases having purchased the stock in August/September), on site unsold. This creates the perfect storm of trading challenges; this stock is now loss making stock and they are locked into the dispiriting process of minimising the associated losses, whilst invariably always being behind market reality. All the while having no more funding left to purchase fresh used car stock at the prices required to then be profitable!

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And it is this lack of liquidity that will drive down prices and make liquidation so challenging for owners, and even for those working within this market full time; professionals like me. All businesses have a maximum stocking allowance for their used car stock holding, the vast majority of which is still invested in very expensive (now loss making) used car stock that isn’t selling! The result being that as financial pressure and negative forces for prices build within the specialist high performance car used car market, only the very best examples are going to attract cash offers for straight disposal.

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In this market anyone with liquidity and the experience required to still be operating, will be able to purchase stock in a market with limited competition, and they know it. Unfortunately this inevitable lack of competition only drives prices down and this is not going to be a positive liquidation and disposal market for owners of these cars.

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One of the unfortunate consequences of these market conditions is an increase in owners listening to Autotrader, PistonHeads etc. then putting their car up for sale on these platforms. Now when coping with a market with limited disposal options, I understand the thought process involved here but it really is doomed to fail. Publications like Autotrader are not really fit for purpose when it comes to selling high value, high performance specialist cars; still though, they will gladly sell you the dream and take your money.

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If it sounds like I have a “Beef” with Autotrader, then it is because I do. There is no doubt that it has it’s market but it is important to remember that neither Autotrader (as an organisation) or anyone working there, has ever run a successful used car business; so I find the idea that they can advise you on retail pricing absurd. And the very idea that a private individual will come along to your driveway and pay you anything like the prices being achieved by a franchised dealership (without any of the associated warranties and protection) is even more so. Still though the adverts keep appearing!

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So where to turn now for the owners of specialist high performances cars, (the marques listed at the start of the article), those looking for the right expertise and experience; that required to facilitate in the immediate liquidation of their car? A process requiring skill, expertise, the utmost discretion and excellence in execution.

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Well with unrivalled experience in liquidating specialist high performance cars and the contacts base within the professional community, (both franchised dealers and the most knowledgeable specialists), you could contact me for a market consultation. I am not going to promise you for one moment that I work with every car that is offered, or with every owner that contacts me.

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In truth I choose to advise and help everyone but only work actively with 10% of the owners who contact me; and their associated cars. Offering immediate cash purchase, (should circumstances dictate), or the facility to act as your trusted conduit to the market, returning the best prices, I am the ultimate solution provider for those looking to dispose of their specialist high performance car.

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Please feel free to reach out to me directly via LinkedIn should you wish to arrange a consultation call.

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Andrew.