Motor dealers across the UK made an average loss of £13,400 in February this year, according to new figures from dealership profitability company ASE.
ASE said that the statistic was the same as 12 months ago, even though the industry saw a 22.6 per cent annual rise in private registrations. It said that despite the increased figure, it only recorded a two per cent increase in new vehicle sales compared to the year before.
Profitability is at the heart of running a successful business, whether you are selling high-end vehicles or used cars at the cheaper end of the market. However, it is also important to protect your businesses against unforeseen losses so you should ensure you have the right levels of insurance. As well as general motor trade insurance, it’s worth considering a combined motor trade insurance policy to protect your premises as well as its contents.
ASE said its figures suggested that some dealers or brands were self-registering vehicles in the private category.
ASE chairman Mike Jones told Motor Trader: “Used car performance has not, as yet, been negatively influenced by the self-registration exercises we have been undertaking with margins remaining steady at over 10 per cent.”
The report found that used car sales were two per cent higher in February compared to a year earlier and that dealers were reducing their used stock ahead of the new registrations coming in this month and the expected high number of used vehicles coming on to the market.
It said that the average dealer spent around £96,000 less on stock in February, although this was still five per cent higher than the figure for the same month in 2015.
Mr Jones added: “Given the volume of vehicles registered in the last few days of the month, we are expecting used stock levels to rise once more.”