Selling cars is a far riskier and more complex business than we might think, judging by recent failures. Family-run VW dealership Hayseldon has this week fallen into administration after 66 years of trading, the latest group finally pushed over the edge by wider stock and supply chain issues in the auto industry.
Yorkshire based Hayseldon joins the recent closure of Ford specialist Pilgrims and the supercar dealership GVE London. They lead a long list that follows last year’s spectacular collapse of online car dealer Cazoo after years of rapid expansion.
There are more than 15,000 car dealers in the UK, of which more than 6,000 are franchised dealerships of larger groups. The auto industry’s many moveable parts have been shaken up significantly in recent times, not least during the Covid pandemic. Shrinking stocks of used cars became a huge problem: reduced production of new vehicles during lockdowns worldwide was exacerbated by a global automotive chip shortage and, more recently, the Jaguar Land Rover cyberattack.
Throw in a cost of living crisis, higher wages for employees, business rate increases and the soaring costs of leasing and operating large showrooms and customer centres, and suddenly the problems that many dealers face routinely are hugely amplified. The most important of these is the perennially wafer-thin margin available to the industry. Some small second hand cars are regularly sold at a loss, with the shortfall recouped on selling warranties. It’s a tough, finely balanced game that, so far, high volume e-commerce has failed to revolutionise.
Mispricing of used cars is a huge cost to UK dealers. Researchers identify two primary mistakes: overpricing slow-selling stock and under pricing fast-moving, popular vehicles. According to Auto Trader, as of September 2025 there were around 63,000 used cars in its platform that it judged to be priced below their optimum retail value, representing a £26.7m “margin opportunity” if they had been priced correctly. The level of used car profit being left on the table by dealers is worrying, especially when there is a restricted supply of used vehicles in the market. Since used cars contribute heavily to overall profitability, clever dealers will adopt dynamic pricing strategies supported by real-time data.
September’s new plate day saw the UK new car market grow by 13% to 312,891 units. The modest rise, driven mainly by electric vehicle purchases, marked the best September for the industry since 2020 but was still 10% down on the same period in 2019 – the final year before Covid began affecting results. Non-fleet buyers of both new and used cars are also being squeezed by huge hikes in motor insurance rates.
Motor sales insolvencies totalled 199 in the nine months to September this year, a number similar to the same period in 2024, but this September’s monthly figure of 29 was the highest for the year.
Dealership groups or independent operators considering the insolvency toolkit for an exit route or restructuring, while the decision is still theirs, are welcome to get in touch for a free-of-charge initial exploratory chat. As ever, the Buchler Phillips philosophy is ‘work out, not bail out’.
Written by Guy Poulter, analyst at Buchler Phillips, a UK based independent boutique firm with an impeccable Mayfair heritage, specialising in corporate recovery, turnaround, restructuring and insolvency.