In a recent statement, the chairman of Lookers PLC, Andy Bruce, has said that the market for cars in the UK seems to be softening, and that a combination of Brexit worries, and concerns over the future of internal combustion-engined cars (especially diesel) has “taken the froth out of the market.”
Now, Bruce is someone who knows of where he speaks. Lookers is a vast dealer group, with several major brands in its portfolio and turnover of more than STG£2.4-billion last year. While it is primarily focused on the UK market, Irish buyers won’t be unfamiliar with Lookers — it includes Belfast-based Charles Hurst Group (which owns and runs a significant used car supermarket in Dublin) and the franchise for Audi in south Dublin. “We didn’t see all the political rumblings and the indecisive election coming and there’s no doubt that that’s had its effect on the fringes of the market in terms of confidence,” said Mr Bruce. “We think in the full year the market will be down about 3 per cent. It’s definitely taken the froth off the market.”
Impact on Irish consumers
That de-frothing will have a significant impact on Irish consumers. We’ve already spoken recently about the trend of imported cars from the UK having a knock-on effect on both the values and the asking prices for second hand cars here. With some UK dealers knocking as much as STG£5,000 off the price of new cars right now (especially diesels) just to shift stock, Irish dealers are coming close to being at panic stations, as consumers are coming in demanding the sort of lower prices enjoyed by those who go down the personal import route. With the Euro and Sterling heading fast for parity (Sterling has effectively already hit that mark if you’re taking cash out from an ATM, it’s only the official rate that still shows a gap between the two currencies) then the current figure of around 55,000 cars imported from the UK so far this year is only going to grow.
A potential hazard
With that comes a significant danger, though. Clocking. According to an investigation by The Times newspaper, clocking is still close to epidemic levels in the UK, and there are nefarious ‘odometer adjustors’ offering their services online at rates as low as STG£80. While digital speedos were once supposed to be tamper-proof, those low rates for ‘correcting' them means that dodgy dealers can add thousands to the value of a car in seconds, for peanuts. The Times found that one car in particular, a Mercedes, had had its mileage wound back by more than 100,000-miles.
The practice, an age-old one to boost the value of an ageing car, is now apparently more rife than ever, thanks to the Personal Contract Purchase, or PCP. PCPs have becoming the driving force in car buying in the past five years, but their inclusion of strict mileage limits, as a way of preserving the second hand value of the car, has been driving many owners into the hands of the clockers. With significant cost penalties for exceeding the agreed mileage limits, many customers have been shaving their odometers when handing back their cars at the end of the PCP period.
Concerns with rates of "clocking"
Even dealers in the UK are now becoming concerned, with 36 per cent of them citing in a recent survey worries that the image of mass-clocking is going to have a knock-on effect on their business. According to CAP, one of the UK’s leading used car residual value auditors, one in 16 used cars has been clocked. If that figure holds true across the board, it means that almost 3,500 of the 55,000 cars imported here this year have had a mileage haircut.
Barry Shorto, head of industry relations at Cap, speaking to Car Dealer Magazine, has said: “There’s no doubt that the escalating problems associated with clocking and mileage tampering are now starting to become a cause for concern by dealerships across the UK. The situation demands a tough stance from the industry and the government as not only is it costing honest motorists millions but it is tarnishing the good names of established and reputable car dealers across the UK who are on the receiving end of this deception.”
Protection
Clocking is hard to monitor and tougher to winkle out but the simple message is that if you’re thinking about buying any second hand car, you really need to get it thoroughly history-checked by a car history check provider, such as Motorcheck. If that car is being, or has already been, imported from the UK then it’s even more important, as the new figures from The Times and CAP show. A clocked car can be in far worse mechanical condition than it can appear on the surface, with major components coming to the end of their lives, and an uncertain, unproven service history. Those cars can be far more dangerous to drive, as well as more costly to run. As a consumer, you really need to give yourself the best protection against such practices, and we are here to help.