Demand increases for showroom standard used cars

Meridian Vehicle Solutions says there is high demand from retailers for showroom condition stock, effectively creating a new “grade one plus” standard.

Vehicles that fall into this unofficial category are generally less than one-year-old and are effectively in as-new condition, with almost no cosmetic faults, it says.

Phil Jerome, managing director of Meridian, explained: “The NAMA grade one standard allows for a few minor issues such as small dents and minor missing trim items, but we are in a situation where demand for used cars that can be immediately retailed is so high that there is a further level emerging above this.

“These are cars that can be placed on a dealer’s web site and offered for sale immediately because they require almost no preparation.

“Of course, these cars also command the highest prices - often in excess of the highest level shown by industry pricing guides.”

Because of its medium term rental model, Jerome says that most vehicles remarketed by Meridian fell into this category.

“We are in quite an unusual position because almost all of our disposals cover prestige or semi-prestige brands at the nearly-new end of the market, so we are seeing this trend emerge at first hand,” he said.

“All our cars are inspected on return and include a complete history including a schedule of any work carried out, so dealers know exactly what they are getting.

“Certainly, demand for vehicles of this kind is very high and we are not seeing any slippage in values as we head into 2019.

“In fact, while new car order times remain on the high side, we do not envisage any change in the market.”

Jerome believes that dealers buying this kind of vehicle often operated on a business model of turning around stock much more quickly than other used car retailers, something made possible by the minimum of preparation required.

“These dealers ensure that money is not tied up in any particular vehicle for long and are often very professional when it comes to accessing additional revenue through finance and add-on products,” he explained. “Some even buy cars from us as sold orders.

“Because of this approach, they are able to pay for the best available cars but still generate a very good profit per unit.”

Based in Elstree, Hertfordshire, Meridian was created in 2016 to provide short to medium term contracts for immediate delivery to fleets whose requirement is for premium and semi-premium models for periods of fewer than six months.

All cars are supplied new and pricing is designed to be competitive when compared to longer term leasing rates, it says.