Dealers struggling to find the right used cars at affordable prices may be looking in the wrong places, according to vehicle procurement and fleet management specialist Liquid Fleet.
The company’s insights respond to the latest Forecourt Foresight research from Close Brothers Motor Finance, which reported that 68% of dealers are having trouble sourcing stock affordably.
Liquid Fleet attributes this difficulty to dealers competing for NAMA grade 1 and 2 used cars or those rated 70 and above by Auto Trader, driving prices above book value and shrinking dealer margins.
Instead, Liquid Fleet highlights the profitability of grade 3 cars, which can be purchased at 97% of book value and still yield higher profits after refurbishment.
Martin Potter, Liquid Fleet’s commercial director, said: “The used market has changed dramatically over the past 12 months, moving closer to pre-Covid conditions. Increased labour and parts costs have altered car grading, making grade 3 cars a smarter option than competing for grade 1 and 2 stock.”
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