Bumper to bumper with a built-in bar code
James Ruppert investigates the boasts of the bargain-basement nearly-new car supermarkets
Saturday 12 April 1997
The chief reason people are crowding into its main Newport showroom is that there are hundreds of nearly-new cars on sale. Most are N and P registered, and have covered just a few thousand miles. They have retail prices that show a considerable saving on the cost of a brand-new car. That is because the VAT and depreciation for the first year have been taken care of, with an average saving on most models of about pounds 2,000-pounds 3,000. A Vauxhall Vectra 2.0 GLS bought new in 1996 for pounds 15,630, now - after covering 10,000 miles - will cost pounds 11,995.
As you walk through the entrance to the 400-car Empress showroom, with tightly packed models parked in long, neat rows, one question is begging to be asked: where on earth do they all come from? The sales manager is refreshingly open about how the company acquires these cars: "We have long-standing arrangements with some of the country's largest fleet operators. We buy direct from them at a preferential price and pass that saving on to our customers."
These fleet operators are not just the huge daily rental fleets such as Hertz, but also institutions such as NatWest Bank and various pension funds which act just like car dealers. They buy thousands of models direct from the manufacturers at large discounts, rumoured to be up to 45 per cent less than the full retail price. After staff have run the cars for a fixed period of months and miles, they are then sold at a profit and the process is repeated.
The cars are sold in reasonable condition, but sometimes can look older than they are. That is because they have been put through dozens of car washes and may be treated with little respect by their short-term owners. It is also worth keeping an eye on the mileage. A row of seemingly identical models can have very different odometer readings. Several Nissan Primeras selling for pounds 9,995 had 4,000 to 11,000-mile fluctuations, so these cars need to be selected carefully.
As for the supermarket pricing expectation, the majority of the models are pitched at trade guide prices. So, no big discounts. And the only benefit is the balance of the manufacturer's warranty. In fact, some cars I saw were a touch overpriced. A Vauxhall Corsa 1.2Ls that had covered 11,000 miles was on offer for pounds 7,495. Yet the trade guide suggested a price nearer to pounds 7,000, and a quick flick through some classified ads unearthed Vauxhall dealers selling identical Corsas for pounds 6,995. Empress says prices are set to reflect the demand of the local market. Salesmen here plead tight margins and small discounts of "perhaps pounds 200-pounds 300".
The Trade Centre's Car Supermarket, at Hythe Road near White City, London, has a similar batch of Corsas for sale at pounds 6,799. Special edition Vegas 1.2s with just 700 miles on the clock are going for pounds 7,599. Fiat Puntos seemed cheap here, as 1996 examples started at pounds 5,500. Their Ford Escorts were cheaper than Empress examples and with lower mileages - a 1.8LX starting at pounds 7,999 with about 5,000 miles on the clock. I tried hard to find a Ford main agent that could better this price. DC Cook in Bracknell was having a spring sale, but their equivalent Escort was marked down only to pounds 9,695 from pounds 9,995.
Ford has, in fact, been one of the principal manufacturers to embrace the nearly-new concept. The Ford Direct scheme has seen the company "remanufacture used cars" at a purpose-built facility in Essex. They take back ex-rental cars, prepare them for sale and then put a premium price on the models at Ford outlets.
The more sinister side of this activity is the pre-registration of new cars to inflate monthly sales figures. Virtually all of the mainstream manufacturers do it, but few will openly admit to the practice. That is how a car with little more than delivery miles can end up on your local forecourt. Pre-registering a car can also be a way for a dealer to discount a car to you. This can happen with the more prestigious marques, where the concept of giving money off is frowned upon. Provided, of course, that you don't mind that the "new car" had a previous dealer owner. Meanwhile, buyers of brand-new cars are on a losing wicket - mostly in terms of VAT and depreciation, which in the first year can add up to pretty crippling amounts.
For those in the nearly-new market, prices are going to be pretty much the same whether you shop at a supermarket or a dealer. The big advantage of a supermarket is that there is a huge range of models, of all makes, to choose from. But don't be deceived into thinking that you will be getting a great bargain. Car supermarkets would like to believe that they are a one-stop car shop, but they are not. Take the time to look at local franchised dealers. They should have similar cars at similar prices, usually prepared to a higher standard and often with a more comprehensive warranty. On top of that, they may well be far more eager to please - with a competitive financial package and the all important personal touch.
Certainly there are nearly-new bargains to be had, but you must be prepared, like any wise supermarket-goer, to shop around.
Empress: 01633 284800; Trade Centre Car Supermarket: 0181-964 8080.
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