On Tuesday May 5th, VFACTS released the numbers for Australian new car sales for April. Unsurprisingly, the numbers were dreadful, with a drop of close to fifty percent. However, as Sir Isaac Newton opined, “For every action there is an equal and opposite reaction.”
How does that apply to vehicle sales? Easy. With millions of Aussies on “lockdown”, the dollar spend for critical items such as food, toilet paper, and beverages becomes more important. The outright need to spend on a new car is diminished but there will, and has been, a need for a method of getting around without public transports.
Enter the pre-loved car sales market. With dealerships seeing a drastic reduction in foot traffic, the other option is thanks to modern technology. There are many sites online that provide a method of browsing for pre-owned carsand a leader in the field is Pickles Auctions. We spoke to their General Manager (Motor Vehicles) manager Brendon Green and got the inside story of what is happening for direct and auction sales of pre-owned cars.
Brendon confirmed that new vehicles have “fallen off a cliff” in regards to traffic, echoing the statement from VFACTS. He did say that he felt that the used car market was recovering and quickly. Traffic to the Pickles Auction website and the inquiry section is coming from private and trade buyers. Brendon agrees that the dollar watching is a telling factor in regards to the movement of metal via Pickles.
Most of their movement comes from the sub $15,000 range. The higher end market, call it $60K and above, is almost invisible right now, even allowing for the presence of the premium brands. The second tier, he says, is generally between the $15,000 to $25,000, and reflected in the fact that a substantial number in this segment are vehicles normally a third to half again as much normally.
This lead Brendon to state that at one point in April, it looked as if the site’s private sales numbers had effectively doubled from the middle of March, a clear indication that people with a canny sense of spending knew where to go for a good deal. However it’s worth noting, says Brendon, that a lot of movement comes from the corporate sector. With auctions of business and government oriented and owned cars a mainstay of the business, repeat buyers help to spread the word.
Yearly traffic varies but hovers around 100,000 units. A consistent factor says Brendon, is the continuing trade with state governments such as the Western Australian and South Australian governments. Trade buyers, as such, tend to make up around 65% of the movement through Pickles. However, says Brendon, recent weeks have seen that percentage drop and the skewed more towards the private buyer.There’s a hint of how the business has been affected by the lockdown, says Brendon, in the fact that repossessed cars in numbers have diminished due to the extra measures taken by Australia’s banking industry to assist people at home and in business.
Advertising in traditional media isn’t a major factor either. Repeat business, as stated, makes up a large proportion of the movement so it stems from clients already familiar with Pickles. But “new” media, such as social media exposure, is also driving traffic and the inquiries.
In regards to the types and age of vehicles people are buying via Pickles, Brendon says that the average age of the vehicle is between three to six years old, with the “sweet spot” between 3.5 to 4.5 years of vehicle age. In many cases this means a buyer is getting a vehicle that is still of a current generation or, in real terms, only a model year behind, meaning a lot of features found in new cars may be found in the pre-owned. It also means that quite a few will still have the balance of a factory warranty. That’s a huge peace of mind factor.
He also confirms that their vehicle sales traffic is very much like the traditional dealerships sales. SUVs and work utes currently make up the overwhelming majority of vehicle sales via dealerships, and Brendon confirms it’s the same through Pickles including light commercial vehicles. And not unlike the dealer network, there are some brands that people will show faint interest in but not enough to move any further.
Inquiring is easy, says Brendon. Given that a solid number of vehicles sold are of a fixed price, actioning an inquiry on one is done by visiting the Pickles website, and following the prompts for a specific vehicle or using the inquiry button embedded in the site’s contact options. There is also an auction style “Buy Now” option, allowing a buyer to select a preferred vehicle, reserve the vehicle via the Buy Now, and pay a holding deposit prior to full payment and collection or transportation.
Information is as much as can be found via a thorough vetting process, with all vehicles entering the Pickles sales process being checked inside and out, top to bottom, before being listed. Again, it’s a peace of mind situation, with a potential buyer knowing that it really is a case of what you see is what you get. Any bumps, scrapes, paint imperfections are registered and detailed in the vehicle description, as is any available service history.
A physical visit is permitted as well, with an on-site staff member ready to greet potential buyers and show the vehicle to them whilst following all mandated social distancing and cleaning protocols. For out of city and state buyers, the detailing process comes back into play, as Pickles do ship vehicles interstate and to country locations regularly, plus ship vehicles from out of Sydney and NSW to their main Sydney office location. It’s simple good business practice and adds weight to the excellent reputation the company has.
The level of service extends to the flexibility of the transactions. Brendon recalls the site’s first sale. An inquiry and purchase was done at 2AM, shortly after the site’s launch at 9.30PM EST. This style of business continues, he says, with FIFO (fly in/fly out) and shift workers an appreciable part of the buying numbers.We closed by asking about the demographics of buyers. Brendon says there is no doubt the dollar demographic is a strong one, and again harkens back to the value seeking buyers. Age wise it’s not unusual in that it’s private buyers between 25 to 50 years of age. The “Mum” drivers, the compact to medium SUV drivers that are taking advantage of what Pickles offers and updating the SUV, also feature well. Another strong sector is the tradies, also updating and considering the Federal Government’s tax incentives, this area is also flowing well.
Area wise Brendon mentions the mining buyers from W.A. and of particular interest was the mention of buyers from Canberra. People that had cars suffer damage from the wild hailstorms earlier in 2020 have been sourcing replacement vehicles via Pickles.
The Pickles website is where people can visit twenty four hours a day, seven days a week, and follow the inquiry process to buy from over four thousand vehicles at any time.
With thanks to Brendon Green at Pickles and the team from Origin Agency.