Stocks Car Sales
Stocks Car Sales
Second Hand Car businesses facing closure
A car is the second largest purchase that many families make. Most people cannot afford to make a payment for a new or second hand car out of cash and credit will be required. So what do you do then if your line of credit has dried up.
This is a problem being faced by very many car dealers at the moment. Industry figures reveal that new car sales in the UK have fallen by 15.7% in June this year compared to June last. In May fall was 25% year on year.
In the month of June some 176,000 units were sold across the UK. Many of these will have been sold to industry, with the private buyer sector really struggling to purchase due to a lack of credit around for them to utilise.
The Government scrappage scheme which came into effect on 18th May has had some effect with nearly 30,000 vehicles over 10 years old being cashed info £2,000 against the price of a new car. At this rate the scheme which was due to last a year will have exhausted its funds by October. The Government has said it will not be extended.
The problem may then re-occur that the market starts to contract yet again.
I am hearing problems from second hand car dealerships that they simply can’t move older cars. If you had a chance to purchase a second hand car for £10,000, or a new car for the same amount, with a five year warranty, what would you do?
This means that there are a number of dealers in the market who have stock that they have tied up, but which they can’t liquidate.
These businesses have rents to pay on the units that they keep. They have wages to pay, and possibly finance charges for borrowings they have which they may have used to purchase stock.
If you run a business such as this, you may be needing to take stock of your current situation. If you are struggling it may be possible to take steps to, extricate yourself from debt, and re-start in a debt free company.
A professional advisor, will be able to offer advice on something called a pre-pack administration, or liquidation. This will enable the debt to be left behind and the stock and lease and employees to be transferred to a new company.
HiTech Automobiles Sales, Stock and Accounts Manager
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