Dealer worries over agency model almost doubled in last month

• 42% of dealers now say agency model is a challenge to the future of their business, compared to 22% in September

• Market changeover to electric vehicles (EVs) is the biggest worry for dealers this month, shows October’s Startline Used Car Tracker

• Motor finance availability and growing compliance demands are also concerns

Dealer worries over the growth of agency agreements have doubled in the last month, according to October’s new Startline Used Car Tracker.

The factor was named as a future challenge to their business by just 22% of used car retailers in September but has jumped to 42% this month.

Paul Burgess, CEO at Startline Motor Finance, said: “For most of this year, around 20% of dealers have mentioned the agency model as a challenge but there has been a definite increase this month. Why this has happened is not clear, but it may just be that the full implications of manufacturer plans to attempt to manage their vehicles in the used market for a longer period of time – into second and third lives – are becoming more obvious.”

Other future challenges named by dealers included the market changeover to EVs (62% - up from 49% last month), stock shortages (57% - down from 59%), finance availability (47% - down from 57%), increasing compliance requirements (40% - up from 39%) and falling desire for car ownership (25% - down from 39%).

Paul said: “Despite the government delaying compulsory new zero emissions car sales until 2035, the market knows that electrification is coming at roughly the same speed as before, with many manufacturers committed to full EV ranges around the end of the decade.”

Elsewhere in the Startline Used Car Tracker, dealer optimism remains high at 72%, sustaining the jump seen in September, when it almost doubled to 73% compared to 37% in July.

Paul said: “We are seeing a strong sense of optimism among dealers across several metrics in the Tracker research and there appears to be a definite expectation that 2024 is going to be a good year for used car retailers.”

The Startline Used Car Tracker is compiled monthly for Startline Motor Finance by APD Global Research, well-known in the motor industry for their business intelligence reporting and customer experience programs. This time, 336 consumers and 60 dealers were questioned.