Soaring property costs pricing out motor traders

As property prices continue to climb, motor trade companies are having to go to greater lengths to find suitable business premises.

Robert Stephens, director of roadside commercial property specialists Robert Stephens & Company, told AM-Online that the problem of dealerships and garages being priced out of areas is particularly prevalent within the M25. He explained: “It is now nigh on impossible for anyone other than a manufacturer or a top 10 motor group to secure land on which to build car dealership premises.”

For any dealership or car repair business looking for a location, while price is going to be the critical concern, it is also worth considering how a specific site might impact on the cost of a combined motor trade insurance policy. When getting cover for a business, its stock, and its premises, factors like crime rates and the risk of things like flooding will directly influence how expensive a motor trade insurance quote will be.

The property sector has witnessed huge growth following the recession and prices have reached record highs. Meanwhile, car sales have increased for 31 consecutive months – this has resulted in many motor traders looking to expand their operations, but the high property prices are preventing them from doing so.

Tom Rigg, principal surveyor in automotive and roadside at GVA, said he has seen the number of new properties sought by clients more than double in the past two years, from 68 in 2012 to 153 in the first nine months of 2014.

He explained: “At the moment, the consideration for a lot of dealers is the need to relocate and up-size their dealerships to meet manufacturer standards. Our own requirements from clients and those of other agents in the sector have been fairly major.”