A one-marque man
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Andy Smith at Paynes of Hinckley explains how he brings in used vans, and the importance of having just one name on the forecourt By Kevin Swallow
BEING ABLE TO sell effectively is only part of what it takes to run a successful used van operation. Buying good-quality stock with retail appeal at the right price is the other, perhaps more important, part of the equation: and this is where Andy Smith may have the edge. Responsible for the used van operation at
old-established Leicestershire Ford dealership Paynes of Hinckley, Smith uses an independent buyer who buys stock at auctions on the firm's behalf. A good independent buyer "He's a highly knowledgeable, semi-retired guy who ran his own business for 40 years and is out there on our behalf two or three days a week," says Smith. The two
individuals work closely together, with Smith highlighting vehicles set to go under the hammer that he is interested in.
Prices are discussed, as is the question of how much it might cost to bring a prospective purchase up to retailable standard while still leaving enough of a profit margin for the dealership. Smith has other sources
of stock, including ex-demonstrators, courtesy vans and parts vans from the dealership itself.
Part-exchanges represent another valuable resource. "I would say they account for about 25% of our stock," he reports.
"Because I know so many of the businesses around here, I can be pretty certain of which ones will be changing their vans within the next six months and what the part-exchange will be. "Usually we keep about 40 LCVs in stock," he continues. "Recently, the total has
risen to 45 but in the past it has dropped as low as 20.We sell approximately 22 a month."
Smith has a policy of only retailing Fords, an approach that is easy to defend given the breadth of the manufacturer's model range and the size of the Ford parc. "Sell a customer, say, a second-hand Peugeot and the next thing you know he
will be having it serviced at the local Peugeot dealership and buying his vans there too."
Used van prices were rising at the time of writing, which was landing Smith with a familiar problem. He had to pay in excess of guide price for stock and retail vehicles at above book price to maintain a sensible margin.
Unfortunately, many finance houses tend to stick to book values when advancing funds, which means buyers can be faced with a shortfall. "With at least one of the finance houses, however, I'm able to speak to the underwriter to explain the situation, and will sometimes ask somebody from British Car Auctions to speak to him too," Smith says. That way, the funds will hopefully be released: and Paynes of Hinckley will make another sale. •