Motor auctions houses are facing severe cost increases, and are likely to raise charges to car dealers, fleets, and other sellers as a result, warns the RMI Society of Motor Auctions (SMA).
Many motor auctions houses have held their selling charges to dealers over the last few years by absorbing cost increases, improving efficiencies and reducing their margins. Some were actually able to lower charges as a result.
According to Louise Wallis, Head of the SMA, auction houses are facing greater economic pressures, and must pass on costs to their customers: ‘Energy and business rates have both increased, as has the cost of insurance, labour and consumables. The 50 per cent increase in fuel prices since December last year has also made a significant impact on margins.’
She continues, ‘The vehicle remarketing industry is a low margin, high turnover business, which is only sustainable from a low cost base.’
There has been huge investment in the industry in the last few years, particularly in improved and new-build facilities. Many new and additional services have also been introduced, including specialist collection services, vehicle preparation, and IT-based bidding and other internet services. ‘All this brings huge benefits to auction customers,’ said Wallis.
Wallis adds, ‘Auctions are an integral, transparent and ever-more important part of the distribution chain for used vehicles. Auction charges need to be viable in order to provide the expanding range of services increasingly demanded by both auction buyers and sellers.’