Dealers urged to consider economic headwinds
Dealers have been encouraged to get a better understanding of how the economic environment impacts used car buyers.
The RAC says that dealers should consider warnings about an economic downturn from organisations such as the IMF, and plan their proposals accordingly.
Sean Kent, RAC director of sales at Assurant, the Fortune 500 company that partners with the RAC in the warranty and aftersales sector, said: “Used car sales remain pretty consistent in terms of overall numbers during both strong and weak economic periods but this reliability tends to obscure some fundamental shifts in customer attitude. When we enter a period of low growth, the priorities of a large proportion of car buyers can adjust.
“At the core of this change is the role of the car as reliable daily transport. Potential buyers who feel that the cost of living is likely to rise need to feel that the purchase they are making is sensible. They want to minimise the chances of unexpected expenditure.
“Dealers need to ensure that their propositions are tackling these concerns head-on, that consumers dealing with your business can feel confident about the vehicle they are considering buying but also the package that has been constructed around it. We’ve been looking closely at the role of the warranty in this situation.”
He said that recent internal research undertaken by the RAC Dealer Network showed that more than seven out of 10 dealers (71%) view motor warranties as the most important part of the used car proposition.
Kent added: “This indicates that dealers strongly continue to see the warranty as core to their overall proposition for used car buyers. There is an argument that, in tougher economic times, it is probably more important than ever.
“The reasons for this are simple and convincing. The warranty provides protection when the customer drives out of the showroom. It creates a high degree of peace of mind when it comes to a car which, for most people, is both among the most expensive purchases they will make and the transport on which they rely to get to work and generally live their lives.
“Dealers have several options when considering their warranty offering, including making them longer or more comprehensive – and we are already seeing evidence that the standard warranty offered across our network has increased from three months to six over the last year or so.
“Doing this is a relatively inexpensive and effective move for dealers – a matter of a few pounds per car. However, it is not just about added protection but making a vote in the quality of the vehicle. It communicates a valuable message to the customer and one that has a high degree of resonance at this point in time.”
