Dealer sector Post-disaster: time to tighten your trade-in processes

Tony.everett@mta.org.nz

able to dig up the evidence, but if you’ve asked the right questions you start with a foot in the door.

New vehicles

Registrations of 9,539 were down 19 percent on February 2022. The market is down 16 percent across the first two months of 2023. There were 6,259 new passenger vehicles, down 19 percent on February 2022 and down 7 percent YTD. New commercials at 3,280 were down 33 percent on February last year, and down 31 percent YTD.

Flood damage can sometimes take quite a while to appear, but the consequences can be very, very significant – as in making the car next to worthless and being of scrap value at best.

Electrical corrosion might appear quickly, but body rust can take much longer. And remember, once the car is in your care, then the monkey could still be on your back even after you have on-sold it.

I apologise if this sounds like a trip back to ‘selling 101’, but no harm done if it jogs your memory. It’s easy to let the basics slip, so this is the time to revisit good practice methodology.

In this context, that starts with a thorough scrutiny and evaluation of buying and trade-in opportunities.

The geographic spread of potential flood impacts covers most of the North Island and the top of the South Island, and it’s a sure bet there will be owners out there trying to offload uninsured, flood-damaged vehicles. At a physical level, check the vehicle thoroughly and look for the expected tell-tale signs.

These include a musty smell, fogging of interior windows and lights, tidelines in difficult or less-visible places, silt and flood debris in nooks and crannies, and so on. Ideally, the vehicle should go up on a hoist so you can get a good look.

On the flipside, it’s important to be alert to the opposite effects. These can include an older vehicle now being in immaculate condition as if it looks like it has just been through a substantial groom.

Pay close attention to the current owner’s address. Check to see if it’s a known flood location, while recent changes of ownership might be a warning signal – if recently purchased, why are they seeking to sell now? And, of course, watch out for the old “selling on behalf of my friend or relative” type of situation.

Always ask relevant questions, notwithstanding that showing an interest in sellers and their vehicles helps to establish rapport. It’s worth remembering that the car is their baby and, if they’re genuine, they might have some good information to impart.

Check out the vehicle’s service history; have they had any problems and what’s been done to the car in their care.

And here’s the real ‘gotcha’ question. “Is there anything you [the owner] know about this vehicle that I [the dealer] should know about?”

This last question forces the owner to either come clean or withhold information.

In general, the Consumer Guarantees Act does not typically apply to private transactions but the Fair Trading Act does, so even private sellers can’t withhold or provide misleading information.

Yes, recourse may later rest on being

Be mindful of the seller’s body language, which might serve to contradict the verbal answers. Hesitation, a shifting stance, looking away and so on might all be clues in themselves. Reading body language really is an important part of every salesperson’s operating manual. A set of pre-defined questions on a trade-in evaluation sheet could be a good strategy. Notwithstanding this is good practice anyway, it also serves as a valuable record if ever needed later.

Remember, a disputes tribunal often cites that a salesperson buys or sells lots of vehicles, but a customer only buys or sells one.

The customer is immediately ahead, so anything that helps balance the ledger will help you. His or her signature on the form would bring added credence. Ultimately, a written summary and agreement shows customers that their responses are being recorded and that might help bring some honesty to the occasion even if it doesn’t manifest in an outright mea culpa at the time, but perhaps later through rejection of your trade-in offer.

And for future reference Waka Kotahi maintains a damaged vehicle register Written off and damaged vehicles Waka Kotahi NZ Transport Agency (nzta.govt.nz). This tracks vehicles written-off by insurance companies, and is a useful resource to check the vehicle you are appraising doesn’t have history – ie as is written-off, bought at damaged auction, ‘fixed up’ and rebirthed. Good practice should always be applied, but in these flood-ravaged times it carries extra relevance. Be careful out there.

Model and brand performance

Top 15 models included: Nine SUVs, four utes and two cars. Hilux, Swift, Eclipse Cross and RAV4 have started the year strongly.

Toyota again claimed the market lead for February, and is already building a strong lead for the year so far. Product shortages continue, but to a lesser extent than previously.

Across the first two months of the year many brands are behind same point last year. Toyota, Suzuki and Kia are the only brands in the top 10 bucking that trend.

Outside the top 10 list, Skoda, Land Rover, Peugeot and Porsche have started the year well.

Suzuki Swift

Took out first place in the passenger/SUV market with 487 units, including 171 hybrid varients.

DRIVE TECHNOLOGY MIX:

ICE 75 percent, Hybrid 13 percent, EV 8 percent, PHEV 4 percent.

1,268 Hybrid - including: 171 Swift, 151 jazz, 122 RAV4, 99 Corolla and 89 CH-R.

773 EV - including: 143 BYD Atto3, 104 MG ZS, 95 Tesla Model Y, 94 Kona and 73 Tesla 3.

354 PHEV - including: 170 Eclipse Cross, 32 Sorento, 23 Escape, 16 Range Rover and 15 MG HS.