Questions dealers ask

Use what comparable cars actually sold for, not what they are advertised at. Match on make, model, engine, trim, year, gearbox and a mileage band within about 20,000 miles, and look at sales from the last 90 days. Advertised prices include cars that have sat unsold for months at prices nobody will pay, so averaging them gives an optimistic figure that prices you out of the market.

For an independent dealer, usually slightly below it. Sold data includes franchised dealers and car supermarkets, whose brand, warranty and finance offers command a premium and pull the median upward. A no-brand independent typically needs to be around the fortieth percentile of recent sold prices to move stock reliably. That is not underselling — it is pricing to the position you actually occupy.

Expected UK mileage is roughly 8,500 miles a year, and a car inside the normal range for its age needs no adjustment. What matters more than the miles themselves are the thresholds buyers filter at: 100,000 in particular, and to a lesser extent 60,000 and 80,000. A car at 101,000 miles is invisible to a large group of buyers who set a hard ceiling, so the value gap across that line is far bigger than the mileage difference justifies.

Only after checking it is genuinely past the normal selling window for that specification, and only after ruling out the causes that are not price: a weak advert, the wrong season, a dead local market, or a glutted segment. If the car is already at or below the market median and still not selling, cutting further will not work and simply destroys margin. When you do move, make one meaningful cut that lands the car just above the sold median rather than several small ones, which teach buyers to wait for the next reduction.

Most used cars sold by independent dealers go out under the VAT margin scheme, where VAT is charged on your margin rather than the full selling price. The calculation is the selling price minus the purchase price, divided by six. It is one sixth rather than one fifth because the margin is VAT-inclusive. Vehicles sold VAT-qualifying — typically ex-fleet, ex-lease and most commercial vehicles — work differently: VAT is due on the whole selling price, though you can reclaim the VAT on the purchase.

The gross margin is £2,000, so the VAT due under the margin scheme is £2,000 divided by six, which is £333. You retain £1,667 before your other costs. VAT is not charged on the £10,000 selling price under the margin scheme.

No. Because the VAT falls with the margin, every pound you come down costs you five sixths of a pound in retained profit. A £600 price cut on a margin scheme car costs £500, not £600. This is why holding out on price is often more expensive than dealers assume, since a car sitting past its window costs roughly 2 to 3 percent of its value a month in capital, depreciation and opportunity cost.

Work backwards from what their car will retail for. Subtract prep, subtract your warranty reserve, then subtract 1.2 times the profit you want to retain. The 1.2 grosses your target up to cover margin scheme VAT — if you want to keep £1,200 you need a gross margin of £1,440. Leaving that factor out means overpaying on every part exchange by a sixth of your target profit.

Buyer fees at the major UK auction houses are banded by hammer price rather than charged as a flat percentage. That means the cost of a bid steps up as you cross band boundaries, so one more increment can cost considerably more than the increment itself. Percentage rules of thumb are least accurate on cheap cars, where a fixed fee is a much higher effective percentage. Fee rates also vary by account, so use your own table rather than the published one.

Expect the buyer fee, a documentation or admin fee on essentially every purchase, an assured or inspection fee where the lot carries an inspection, transport from the auction centre, and storage if you do not collect promptly. Together these routinely add £80 to £150 before transport, and transport itself ranges from under £100 locally to several hundred pounds nationally.

A cosmetic grade describes paint and panel condition and is a disclosure rather than an automatic deduction. Cosmetic work is optional and whether it costs you anything depends on your market — a scuffed bumper on a £4,000 car is often left as it is, while the same defect on a £24,000 car must be fixed. Mechanical grades and red condition items deserve far more weight, because that work is rarely optional.

Work backwards from the retail price the sold market supports for that exact specification. Subtract the gross margin you need, remembering to gross your target up by 1.2 for margin scheme VAT, then subtract prep, warranty reserve, transport from that specific auction centre, and auction fees at your actual rate. Write the resulting ceiling down before the lot comes up — the arithmetic is hard to do accurately in the hall, and the bidding is designed to make one more increment feel trivial.

There are six common causes and they need different responses: it is priced above market; it is already at or below market and the price is not the problem at all; the advert is weak, with too few photographs or missing detail; it is the wrong time of year for that body style; there is no local demand for it; or the segment is glutted. Cutting the price fixes only the first. The most expensive mistake is repeatedly discounting a car whose problem was never price.

It depends on price band, how common the car is, the season and your local market — a single rule across all stock causes panic about healthy cars and complacency about genuine problems. As rough starting points: cheap hatchbacks under £6,000 typically sell in 20 to 35 days, mainstream family cars in 30 to 45, larger or premium cars in 40 to 60, and prestige or specialist cars in 55 to 90. Replace these with your own recorded figures as soon as you have thirty or forty sales.

Days' supply is the number of cars currently advertised in a segment divided by the daily rate at which they sell. Under 45 days means the market is undersupplied and you will hold your price. Over 150 days is a glut, where the only lever anyone has is price and larger operations can outlast you. Sold volume alone is misleading: a segment can have very high sales and still be glutted if supply is higher still.

More than the discount you will eventually take. Counting capital tied up, depreciation of roughly 1.5 to 2 percent a month, floorplan cost if you use it, forecourt space and the deals you cannot do, a car sitting past its window costs somewhere around 2 to 3 percent of its value a month. On a £9,000 car that is £180 to £270 every month, which is why the discount refused in month three usually becomes a larger discount in month six on a car that has also cost you several hundred pounds to keep.

DealerIQ is buying and pricing software for independent used car dealers in the United Kingdom. It reads the daily BCA auction catalogue against the UK sold-market record and returns, for each car, a buy or no-buy verdict, the maximum bid that still hits your target profit, the price that will actually move the car, and how long it should take to sell. It also scores your existing forecourt for ageing, pricing position and readiness, and tells you why specific cars are not selling.

No. The buying copilot is built around the daily BCA feed, but the pricing tools, stock management, part exchange appraisal and registration lookup work for any independent dealer however you source your stock.

Every figure is computed from the UK sold-market record and the live auction feed. Nothing is invented — where the data is thin, the product says so rather than presenting a confident number. It never estimates what you paid for a car, so no profit figure appears anywhere until you enter your own buy-in cost.

Minutes. You enter your website address and your forecourt imports itself — cars, prices, mileage and how long each has been listed, all read from your public listings. Entering your buy-in costs later switches on real profit tracking.

There is a seven-day free trial with full access. Paid plans: Basic £199 a month (watch one rival dealer and one supermarket), Starter £299 (three of each), Dealer £499 (five of each, the full intelligence desk), Ultimate £599 (national reach, no caps). Multi-site dealer groups are priced individually — talk to us.