• Almost half of dealers (47%) say that the cost of staff will have the biggest impact on their business this year
• Other concerns include the cost of premises (33%) and generally falling used car sales (33%) shows January’s Startline Used Car Tracker

The January Startline Used Car Tracker shows car retailers are also worried by the cost of premises (33%) and the potential for used car sales to fall (33%).

Other concerns mentioned include higher stocking costs (30%), higher vehicle preparation costs (27%) and higher advertising costs (22%).

Paul Burgess, CEO at Startline Motor Finance, said: “Dealers have found themselves in a situation in recent times where all kinds of unavoidable costs – from premises to advertising   – have been rising and often quite substantially.

“However, it is still noteworthy that the cost of staffing is by far the biggest factor mentioned in our research. Anecdotally, we know dealers have been having to pay more for staff and that recruitment is an issue. This is something that has affected nearly all businesses although there is some evidence that wage increases in the overall economy are beginning to soften.

“Further rises remain likely and together with the rising costs that they cite in several areas, alongside the possibility of generally falling used car sales, there is potential for margin erosion.”

Some dealers are also worried about falling income from servicing (15%) and aftersales (10%), the Startline Used Car Tracker showed.

Paul said: “While the numbers involved here are quite low, it is still an interesting finding. Servicing and aftersales tend to be consistent sources of income for dealers but there is concern that both could be affected in 2024.

“The research doesn’t explain why this is the case but there could be a variety of explanations ranging from worries that the cost of living crisis will see more motorists skip servicing through to apprehension about the impact of electrification on workshops.”

The Startline Used Car Tracker is compiled monthly for Startline Motor Finance by APD Global Research, well-known in the motor industry for their business intelligence reporting and customer experience programs. This time, 313 consumers and 60 dealers were questioned.