BCA New tactics means less margins..

[Funny Farm 7]

I have noticed a few things BCA do differently now which means less margins for us dealers. I do buy the majority of my cars for BCA, but I feel the day of being on your own when the first car goes through have long since past... Good news for BCA.. Bad News for us.

1, The biggest change to the market is the way stock loans are being thrown around, which means "less experienced" dealers are throwing their hand up at everything at any price. This means busier auctions as there's more money in the markets = higher prices.

2, BCA (Blackbushe) seem to be holding out for higher prices and are happy to put a significant amount of stock back through the auction 2 or 3 times. This is why on a typical Monday or Wednesday we used to get between 800-1200 cars go through, now we are getting 1600 - 1900 cars.

3, More bidding off the wall and online.. Its not just the bidding off the wall (which has always being there) in the hall. It now seems to be on the internet! I bid on a car last week, I was out bid "online". I was encouraged by the Auctioneer to go £50 more which I declined the hammer went down. I noticed the car was in the next auction.. This is more frustrating as you have an idea in the hall if anyone is bidding but not online. 

For me, the market has changed in the past 2 years. Margins are tighter, stock is more difficult to get at the right price and profits are down. We usually get the odd months where cars are cheap and sales are good, these are becoming less and less frequent.

 

 

[justina3 518]

Yep totally agree its enough to send you to the funny farm.

[trade vet 703]

5 hours ago, Funny Farm said:

I have noticed a few things BCA do differently now which means less margins for us dealers. I do buy the majority of my cars for BCA, but I feel the day of being on your own when the first car goes through have long since past... Good news for BCA.. Bad News for us.

1, The biggest change to the market is the way stock loans are being thrown around, which means "less experienced" dealers are throwing their hand up at everything at any price. This means busier auctions as there's more money in the markets = higher prices.

2, BCA (Blackbushe) seem to be holding out for higher prices and are happy to put a significant amount of stock back through the auction 2 or 3 times. This is why on a typical Monday or Wednesday we used to get between 800-1200 cars go through, now we are getting 1600 - 1900 cars.

3, More bidding off the wall and online.. Its not just the bidding off the wall (which has always being there) in the hall. It now seems to be on the internet! I bid on a car last week, I was out bid "online". I was encouraged by the Auctioneer to go £50 more which I declined the hammer went down. I noticed the car was in the next auction.. This is more frustrating as you have an idea in the hall if anyone is bidding but not online. 

For me, the market has changed in the past 2 years. Margins are tighter, stock is more difficult to get at the right price and profits are down. We usually get the odd months where cars are cheap and sales are good, these are becoming less and less frequent.

 

 

With reference to 3) Hammer down.For the benefit of the newbies ,sometimes if you are ever bidding for a car in the ring and the auctioneer sells it to you as  being ‘ sold subject’ they then occasionally bring down the hammer.If that happens ,the fall of the hammer means you have bought the car and the auctioneer has created a contract.

[Mojo121 229]

We have spells of sales being busy, the rest of the time it's quiet. Massive change. Even having cars priced very keenly doesn't matter. Demand is very low.

[Holmfirth Cars 12]

Autoraper  want us to work on £750 per car,  soon it will be £500, we are all crazy in the Business , working for 1% turnover / profit, no other Business would entertain our costs / profit margins.... 

[David Horgan 564]

Its the free stocking loans thats sent prices shooting for the stars in my opinion 

Most of these stocking plans HAVE to be used to 80/90% of the designated amounts the lender gave to the trader , so as soon as one car is sold it has to be replaced or the trader loses the facility .

Hence they will just about pay any price to turn stock so as not to lose the stocking facility or have it reduced . This has the effect of training sellers to work for nothing , The stocking companies just want the money to keep turning as thats where their profits come from .

Stupid silly times in reality run by people who know nothing about the car trade , 

BCA are one of the lenders now too , designed to sell their own cars , they will fund anyone really because they actually want the stock to return back after taking massive profits for the 3 months on the loans/buyers fees etc . Then of course repeat the success with another sale to another smuk who pays for the privilege . 

Without these free money trees being  handed to fools who cant see past their own eye lashes the trade would be very different and controlled by people who had their own money and wanted to earn a profit .  

Maybe when and if interest rates go up it might be beneficial to those who have their own financial money interests and want to earn a profit again . 

We will see . 

[Mojo121 229]

7 minutes ago, David Horgan said:

Its the free stocking loans thats sent prices shooting for the stars in my opinion 

Most of these stocking plans HAVE to be used to 80/90% of the designated amounts the lender gave to the trader , so as soon as one car is sold it has to be replaced or the trader loses the facility .

Hence they will just about pay any price to turn stock so as not to lose the stocking facility or have it reduced . This has the effect of training sellers to work for nothing , The stocking companies just want the money to keep turning as thats where their profits come from .

Stupid silly times in reality run by people who know nothing about the car trade , 

BCA are one of the lenders now too , designed to sell their own cars , they will fund anyone really because they actually want the stock to return back after taking massive profits for the 3 months on the loans/buyers fees etc . Then of course repeat the success with another sale to another smuk who pays for the privilege . 

Without these free money trees being  handed to fools who cant see past their own eye lashes the trade would be very different and controlled by people who had their own money and wanted to earn a profit .  

Maybe when and if interest rates go up it might be beneficial to those who have their own financial money interests and want to earn a profit again . 

We will see . 

very interesting - didn't know some of this info. I think BCA are quite strict on their facility though - they want collateral.

[metcars 397]

But, the auctions do not want to return to what they would now describe as the ‘bad old days’, pre online bidding, when auction halls were crammed with stock but few buyers, apart from one or two ‘special regulars’ and nothing reached cap clean? No point reminiscing, those days have well and truly gone!

[Mojo121 229]

16 minutes ago, metcars said:

But, the auctions do not want to return to what they would now describe as the ‘bad old days’, pre online bidding, when auction halls were crammed with stock but few buyers, apart from one or two ‘special regulars’ and nothing reached cap clean? No point reminiscing, those days have well and truly gone!

I get told what is was like often. 10-15 sold a week from a decent sized pitch, all with chunky profits, buyers grateful to be able to have a car-not too fussy, cash on the hip, part exs for nothing, loyal returning buyers for good traders, or go away and fix it yourself and if you needed to restock at auction go and take your pick pulled out needing very little recon. Sounds like a dream world.

[justina3 518]

14 minutes ago, Mojo121 said:

I get told what is was like often. 10-15 sold a week from a decent sized pitch, all with chunky profits, buyers grateful to be able to have a car-not too fussy, cash on the hip, part exs for nothing, loyal returning buyers for good traders, or go away and fix it yourself and if you needed to restock at auction go and take your pick pulled out needing very little recon. Sounds like a dream world.

They where fun times indeed for the first few years i didnt even need to go to auction we had main dealers to source stock from and traders who would bring stock around daily stock was so easy to get they where happy to make £100 a car on you.

[Rory RSC 596]

Oh well, it’s how it is so get on with it.

[CRW 73]

Its a bubble that could well burst.  Those with heavy stocking loans must feel like hamsters on a wheel, sod that.

[OneCarefulOwner 4]

Pray the new reg will ease the stock on various auction sites, AT rep came in and said they had 5k people join when DA went live. 

crowded market place, sky high prices 

[David Horgan 564]

26 minutes ago, CRW said:

Those with heavy stocking loans must feel like hamsters on a wheel, sod that.

Know guys who trade on these stocking loans and two admit its a drug and have NO idea where they are with it , but they have to keep churning stuff out at cost to keep the facility open .If they DONT  use it they lose it . 

Next Gear is the worst as they hide the figures very well indeed , but some Stocking loans connected with finance companies say borrow at 2% but they want reciprocal finance deals or the price % goes a lot higher , either way its pressure sales . 

All this has an effect on prices at trade level . 

Its all very clever really , wish i could get involved 

Edited February 21, 2020 by David Horgan

[ModernBagsofRubbish 3]

Despite the stocking loans, Is BCA getting to the stage of Monoply's commission stuff

Own The Biggest Auction (BCA), Own the most used price guide (Cap) & buy the most used cars in the country (webuyanycar)

Have too much hold over the full Job

 

Edited February 21, 2020 by ModernBagsofRubbish

[trade vet 703]

1 hour ago, David Horgan said:

Know guys who trade on these stocking loans and two admit its a drug and have NO idea where they are with it , but they have to keep churning stuff out at cost to keep the facility open .If they DONT  use it they lose it . 

Next Gear is the worst as they hide the figures very well indeed , but some Stocking loans connected with finance companies say borrow at 2% but they want reciprocal finance deals or the price % goes a lot higher , either way its pressure sales . 

All this has an effect on prices at trade level . 

Its all very clever really , wish i could get involved 

Someone I know who does heavy stuff ‘sale or return ‘ for selected dealers had to resolve an interesting problem a couple of years ago.One of his lumpy cars got lifted by a Stocking Loan provider and was then entered for auction when the seemingly  ‘doing well dealer’ suddenly went ‘tits up’.The dealer apparently had put it on his stocking loan facility.( what a nice chap).I think the guy we know then had to bid and get his name on it at the auction to enable him to argue that the seller did not have title to it .He sorted it but what a carry on.

[trade vet 703]

54 minutes ago, ModernBagsofRubbish said:

Despite the stocking loans, Is BCA getting to the stage of Monoply's commission stuff

Own The Biggest Auction (BCA), Own the most used price guide (Cap) & buy the most used cars in the country (webuyanycar)

Have too much hold over the full Job

 

It was pointed to me awhile ago how easy it would be for BCA to ‘finagle ‘ some system to bosh out any cheap left over stuff to WBAC and transport it away to another branch to sell it.It is a potential Conflict of Interest.
BTW BCA do not own CAP however some people say they might manipulate it.

[andymc1973 199]

3 hours ago, OneCarefulOwner said:

Pray the new reg will ease the stock on various auction sites, AT rep came in and said they had 5k people join when DA went live. 

crowded market place, sky high prices 

And 120k leave DA 

[Sean Glover 4]

It’s like someone has flicked a switch since Christmas and everything is going £500/£1000 above CAP as long as you keep your head above water and be clever with what your buying you should be ok I buy most my stuff off social media websites so auctions don’t affect me so much. Just keep treading water until August and it’ll change again 

[Funny Farm 7]

As a dealer I no longer feel in control.

You have BCA and CAP which seem to be throwing out prices £200-1000 higher than Autotrader, then you you sell on Autotrader at there "Marker" price, which means you're being squeezed at both ends.

I sincerely hope something crashes!, I've never had a stock loan, so when I've hit my purchasing limits I don't buy anymore! This used to give an opportunity for others to get a car I potentially would have bid on at auction and vice versa. With stocking loans, no one seems to have that purchasing limit and every decent car is going for near retail price. Its a crazy unsettling market, and like in 2008 something will have to give eventually!!!    

[Rory RSC 596]

Do you get that with a stocking loan you still have to make money?   You have even less margin as you have fees with it.  

With stocking loans you still have a limit. It isn't indefinite. 

So all these fuckers with stocking loans with less experience are actually better retailers than you in the current marketplace and finding a way to grow and succeed and you want to whinge and moan about how it used to be.    Business isn't built on sympathy.   Work on things you can control.  Maybe try a little harder to work on your own business than worry about what others are doing.  If every single funded dealer fails at the same time because they are all broke and penniless at least you can say you were right.  

 

[trade vet 703]

1 hour ago, Funny Farm said:

As a dealer I no longer feel in control.

You have BCA and CAP which seem to be throwing out prices £200-1000 higher than Autotrader, then you you sell on Autotrader at there "Marker" price, which means you're being squeezed at both ends.

I sincerely hope something crashes!, I've never had a stock loan, so when I've hit my purchasing limits I don't buy anymore! This used to give an opportunity for others to get a car I potentially would have bid on at auction and vice versa. With stocking loans, no one seems to have that purchasing limit and every decent car is going for near retail price. Its a crazy unsettling market, and like in 2008 something will have to give eventually!!!    

I think you are in control of your business,you can probably walk away from this job anytime.Like you, I never had any stocking loans and given the T&C’s previously stated,they do not make any sense.Unfortunateley things have changed and it appears that the younger people starting out today have little choice for funding.The thought of trading for years and never owning all your stock,I see as a failure.I say good luck to the stock loaners but I would rather pack in and work as a rip off ‘equity release adviser’ than be controlled by a stocking loan.

[justina3 518]

There are some cracking old wives tales floating around about stocking loans, yes there are idiots who will be burnt but it if it wasnt stocking loans then it would be credit cards or loans the option to borrow money and be reckless with it isnt new.

For me the car supermarkets are more to blame than stocking plan holders, these supermarkets work on pure volume and are happy to sell the car at cost and pressure the sales staff to build in add on "breakdown cover extended warranty lifeshine ect" into the deal to make there profit so cap means nothing to them anymore, its all about economy of scale, buyers fees are for nothing delivery is a deal as your buying lorry loads at a time, valeting companies all want your business, whilst there dropping off all the new cars there taking away your part exchanges for no doubt another next to nothing deal. 

I see it happen locally to me day in day out, this then takes all the grade 1-2 cars out of reach for most of us leaving a huge shortfall and pushes 3-4 grade cars over cap as well you cant sell empty spaces so have to buy something.

[New year revolutions...... 197]

i know of a long term trader always had an easy life who was subsidised by mates in the trade who filled his pitch so they didnt have to declare their cars,the trader hit a bad patch and also liked to snort a bit of stuff,anyway he decided to get a stocking loan  and went and robbed a bank with it.................................no wait he got the stocking loan and put the cars on it he got off other traders,so they made him bankrupt (the finance company) took all his stock ,his premises are now a 2 bob car wash and i know of 2 people who want to give him a legging,because their cars are gone

just sayin................

[trade vet 703]

17 minutes ago, New year revolutions...... said:

i know of a long term trader always had an easy life who was subsidised by mates in the trade who filled his pitch so they didnt have to declare their cars,the trader hit a bad patch and also liked to snort a bit of stuff,anyway he decided to get a stocking loan  and went and robbed a bank with it.................................no wait he got the stocking loan and put the cars on it he got off other traders,so they made him bankrupt (the finance company) took all his stock ,his premises are now a 2 bob car wash and i know of 2 people who want to give him a legging,because their cars are gone

just sayin................

Birds of a feather etc.

32 minutes ago, justina3 said:

There are some cracking old wives tales floating around about stocking loans, yes there are idiots who will be burnt but it if it wasnt stocking loans then it would be credit cards or loans the option to borrow money and be reckless with it isnt new.

For me the car supermarkets are more to blame than stocking plan holders, these supermarkets work on pure volume and are happy to sell the car at cost and pressure the sales staff to build in add on "breakdown cover extended warranty lifeshine ect" into the deal to make there profit so cap means nothing to them anymore, its all about economy of scale, buyers fees are for nothing delivery is a deal as your buying lorry loads at a time, valeting companies all want your business, whilst there dropping off all the new cars there taking away your part exchanges for no doubt another next to nothing deal. 

I see it happen locally to me day in day out, this then takes all the grade 1-2 cars out of reach for most of us leaving a huge shortfall and pushes 3-4 grade cars over cap as well you cant sell empty spaces so have to buy something.

I agree and it is the smaller independent guys who are effected.Its a bit like the saying ‘ borrow $100 from the bank and you have the problem but borrow $100m and the bank has the problem ‘. Excepting The Great Trade Centre, the supermarkets all have huge stocking loans,do big T/O and make little profit.