Is The Rise Of The Used Car Market Down To The Madness Of New Car Pricing?

used cars vs new cars
Quality used cars are hot property right now. With a range of stylish SUVs and reliable hatchbacks falling into the used car market for flexible and affordable prices, are new cars being exposed as nothing short of extortionate?

Hear me out. A new Ford Fiesta will set you back a minimum of £15,995, that’s without optional extras, metallic paint, or any fancy tech. Add all that in, and your average new Ford Fiesta will cost over £19,000. Let that sink in. Compare that figure to the average price of a used 2017 Fiesta that has likely had one previous owner and done under 30,000 miles and there is a staggering £10,000 disparity.

While finance options make buying new cars easier, most consumers are stumping up a big deposit and significant monthly payments only to return the car after three years for nothing in return unless they refinance the vehicle. With cars in the last decade becoming so much more reliable, safety-conscious and durable, is there any need to buy a new car? It’s a well-known fact that as soon as a customer drives their new car home for the first time, it’s instantly worth thousands less, but this isn’t the case with used cars.

Taking Advantage

Hatchbacks in general such as the Toyota Yaris, Ford Fiesta and Volkswagen Polo have some eye-watering price tags when bought new. But with consumer focus in the last few years switching to more spacious SUVs that are more family-friendly, one can find used cars such as the Vauxhall Mokka and Nissan Qashqai for half the price of newer and smaller cars. These great value cars are among the fastest sellers from forecourts.

Used car dealerships can continue to capitalise on the rising new car prices by offering warranty, service plans, and low rate finance options to their customers to nullify the few advantages new cars possess. Buying a new car with a 5-year warranty and something such as a service plan can remove any unexpected or bulky costs for motorist for a considerable time. The biggest worry from a used car buying perspective is after only 12-24 months, forking out thousands for new parts or getting slammed with a full-service cost for over £200 only months after owning the car. Selling cars with manufacturer warranties remaining and offering extended warranties can easy nervous minds and make buying a used car an even better prospect.

Majority In Agreement

More than four in five consumers think UK car prices are still too high despite the good bargains around, according to a survey from independent monitoring company CarPriceCheck.com. Most of the 3,500 car buyers who were surveyed felt manufacturers were being “greedy”, with only 2% recognising the disparity caused by varying tax rates across Europe. A further 14% considered dealers were keeping prices artificially high.

Steve Evans, chief executive of CarPriceCheck, said:

“The question of whether prices have or haven’t fallen may still confuse the consumer, but they’ve certainly embraced the concept of not buying from the first dealer they visit, and the notion of hunting down bigger savings.

“We’ve seen a culture shift since the heydays of the Rip-Off Britain campaign back in 1999.

“Today, the first words a dealer is likely to hear from a customer is ‘What kind of discount can I expect from you?’ – something that was alien to the majority of car buyers two to three years ago.”

For more information on Click Dealer’s services, contact The Clickers on 01782 478220. You can also reach us via [email protected] or through our contact page.

 

 

Click Dealer Appoints Ollie Moxham as CEO in Senior Team Re-Shuffle

Click Dealer CEO
Click Dealer has appointed Director Ollie Moxham as its new Chief Executive Officer in a senior team reshuffle which also sees Managing Director, Gerry Moxham, taking on a new role as Chief Visionary Officer.

The Stoke-on-Trent based dealership performance partners have appointed the former Head of Web, as CEO at an exciting time for the business as it prepares to launch a new set of transactional products and services to the market in early 2020.

On joining the family business in 2010, Ollie was responsible for launching the website design section of the company, which propelled Click Dealer’s amazing growth journey and its rapid rise from the industry’s best-kept secret, to the name on everybody’s lips.

Now with almost 100 employees at its Stoke-on-Trent HQ and over 1400 dealership performance partners spread across the UK, Click Dealer faces an exciting journey as it is set to enter the transactional market in 2020 with both stock acquisition and fintech propositions scheduled to launch in the New Year.

Speaking shortly after his appointment, new CEO, Ollie Moxham said:

“I’m thrilled and honoured to have been appointed as CEO of Click Dealer and look forward to getting stuck into the role and continuing to help our dealership partners to save time and increase profitability.

“Our senior team reshuffle has enabled Gerry to spend more time on cultivating innovative ideas to keep the business at the forefront of automotive technology. He is most certainly not stepping away! We’re merely using this new structure to release him from the shackles of the day to day running of Click Dealer and enabling him to let his creative juices flow more freely, as he continues to work hard on what the future looks like for Click and most importantly, our dealers!

“Pippa will also be overseeing the financial arm of the business and with her years of industry experience and guile, is well placed to ensure that we remain on a sound footing and are well set up to achieve our ambitious growth targets in 2020 and beyond.”

The reshuffle follows last month’s hire of Debbie Fox as Head of Commercial and Lee Rawlinson’s promotion from Head of Sales to Chief Operating Officer back in April.

For more information on Click Dealer’s services, contact The Clickers on 01782 478220. You can also reach us via [email protected] or through our contact page.

Data-driven dealerships are performing better overall

data-driven
Dealerships which invest in data analytics to track market changes, help in pricing part-exchanges and stock for sale and flag up vehicles which are overage do better, sell cars faster and make more profit per unit than those relying just on the management team’s experience and judgement.

The clear message from an Auto Trader webinar broadcast this week on how to avoid or deal with vehicles which have stuck around for too long is that using accurate, up to date market breakdowns helps dealerships navigate these problems and make it stronger, faster responding and able to weather downturns in consumer demand.

The scale of the problem of overage stock is enormous. Auto Trader says that 35% of dealers have cars sticking around for more than the 60-day trade ideal and 49% of stock is overpriced. Nine out of ten retailers lose an average of £24,000 per year because of vehicles not shifting. The cumulative cost to the industry last year was £300 million.

Used car and van dealerships today face pressures that simply weren’t there only just a few years ago. Buyers now spend far more time online researching a possible purchase, an average of 13 hours, so forecourt visits have dropped making it more important than ever that the sales staff convert a walk-on or enquiry into a firm order. Franchised dealers struggling with the new market have put more emphasis on used, adding to the competitive pressures in this sector and there is a further problem that the sheer size of the UK vehicle parc –  up to 32 million last year from 29m in 2013 and cramming 170 vehicles onto each mile of road – is persuading many drivers to seek alternatives such as uber and perhaps suggesting that we may have passed peak demand for car ownership.

These decisions are not just made by experience

Those are macro factors beyond the control of anyone business but there are ways dealers can fight back and move with the shifting market and become more data-driven. AT says dealers need to be much sharper and respond faster, to be more in tune with what sells in their area and that software is now available that can track prices on a daily basis, nationally or within a defined area around the dealership, by brand or type of vehicle and that retailers embracing this technology have a more modern, efficient business.

Market analytics and good DMS software automate a lot of the management information a business owner needs so they can base their critical judgements on fact rather than just informed guesswork.

An AT spokesman said: “This is a data-driven market and these decisions are not just made by experience.”

For more information on Click Dealer’s services, contact The Clickers on 01782 478220. You can also reach us via [email protected] or through our contact page.

 

Increasing Number Of Brits Are Buying A Car Without A Test Drive

A recent study has found that over a quarter of UK consumers would be happy to buy a car online, having never seen the vehicle in person.

It has long been the case that consumers will shop online very comfortably for small value items such as food, toys and clothes. But research now shows that British shoppers are becoming increasingly willing to splash out on more expensive items like holidays, furniture, electronics and even cars!

This correlation relates largely to the generation of consumers who are now joining the automotive market and using technology to find their next car. By using YouTube to look at reviews of cars they’re interested in and looking at dealerships online reviews for quality and service, the modern consumer can quickly ascertain enough information to commit to making a purchase. The advantages of browsing online also makes comparing different models and dealerships easier and more efficient. It is easy to see where the greatest value deal is straightaway, rather than visiting endless showrooms collating a list of potential buys.

Over 39% of people claim that they shop online solely to avoid speaking with sales staff. This is perhaps for a few reasons. One being that they can start to feel pressured into something, and the truth is salesman will always try to upsell, and they can make it sound like a bargain. To avoid any risk of this, shopping online provides a safety barrier between consumers and ‘extras’. Over 86% of people claimed to buy more shopping than they needed when visiting a supermarket. This is down to promotional offers and displays that grab consumer attention when they visit the store. By using a computer to order shopping, the risk of buying non-essentials is reduced drastically.

Customers Seizing Power

While alarm bells could potentially be ringing with regards to a wide case of social avoidance, this is simply customers taking back control. By using various sources online, to scout the competition and listen to unbiased reviews, customers are perhaps becoming more aware than ever of the car they’re buying.

For this reason, it’s important to make sure your dealership is equipped to compete digitally. This includes a social media presence, detailed videos, photos and descriptions of each car on your website, a digital enquiry management system and salesmen who can utilise apps, such as WhatsApp, to communicate with buyers. Having a website with a high SEO score and running a variety of PPC campaigns can also help increase your online visibility and make sure your cars are easy for a customer to find.

Another tool you can use yourself to maximise success is to look on Youtube and see which used car reviews are getting a lot of hits. You can then look at bringing these cars into stock and sharing the website listing in the comments of the videos. When buying for the younger audience, it’s worth considering that they are likely to be interested in cars that have the latest tech, are fuel-efficient and cheap to insure.

For more information on Click Dealer’s services, contact The Clickers on 01782 478220. You can also reach us via [email protected] or through our contact page.

 

Making Your Sales Team Aware Of Outgoing Business Costs Could Increase Conversion Rates

Business costs - lead management
Explaining the costs of your marketing and advertising as well as breaking down a cost per lead could empower sales execs to boost their efficiency in a challenging quarter where every lead counts.

Due to the main driving force behind sales-based roles being the incentive of commission, it’s easy for sales staff to focus on certain leads and neglect others in order to improve their individual number for the month. This can affect the overall profitability of the business. Especially when you’re paying in one way or another for every lead that comes into your dealership. Most sales execs have no idea about the cost of getting a customer into a showroom and the resultant cost of not selling them a used car.

Used car customers can be scared off if they are pressured into placing a deposit or reservation fee too early by sales staff eager for a quick sale. Without spending some time to get to know the customer and their automotive needs, you could see enquiries collapse because customers are feeling pressured into a deal and sales staff are dumping the lead to move on to other prospects. A softer sell approach should be made upon the first contact, offer some advice about the car they’re interested in, similar vehicles in stock they could have a look at etc. Some customers may well be ready to pay a reservation fee straight away, but for those who aren’t, make sure staff remain patient and do what they can to nurture the deal.

Business Alignment

If your sales staff are relaxed and customer-centric then this attitude will transfer positively to customers. Conversely, if sales staff are over-pressured there is a distinct possibility that this will have a negative effect on the buying experience. Staff will feel more engaged with your business if they are involved and have an overall knowledge of operating costs.

When all business expenses are taken into account, it becomes clear that it costs hundreds of pounds per customer, whether they walk into a showroom, call up on the phone, or submit an enquiry form through your website and so on. With this in mind, it’s equally important to arm your sales staff with a relevant stock holding that will appeal to your customer demographic and market area.

Using a Dealer Management System such as ClickDMS will provide a simple and defined history of the make, model, age and price range profiles of your best-selling used cars, and whilst used car buying needs a degree of flexibility, the main steer should come from your sales history.

With the supply of the correct stock, a relaxed and customer-centric business environment, and explaining business outgoings, you can be sure that your sales team will take greater care and responsibility with every lead that comes their way and help your business become more profitable.

For more information on Click Dealer’s services, contact The Clickers on 01782 478220. You can also reach us via [email protected] or through our contact page.

FCA Crackdown Highlights Need For Robust DMS Regime

Retailers failing to meet their liabilities to the Financial Conduct Authority have nowhere to hide as it has published Final Notices withdrawing licences to handle client’s money and deal with credit at the rate of more than one a day so far this month alone.

The FCA has published its decisions on almost a dozen used car dealers since the start of October and these come on the back of many more last month as the authority cracks down on company owners it defines as `not a fit and proper person’ to deal with credit

Reasons vary from dealers failing to declare criminal convictions, not submitting their returns or not paying the annual fees and levies. In one case, the amount overdue was just £72.50.

Some of the notices published since the start of October for car dealers having their Part 4A Permission withdrawn include C O’Sullivan Car Sales and Cars Direct, MMJ Car Sales of Cwmbran, Awesome Motors MT of Barking, Port Dundas Car Sales (Glasgow), S J Quality Cars, Route 66 Motor Company and others while some have been issued against named individuals such Shahjalal Uddin, trading as Redline Motor Company.

The cases underline the importance of having robust DMS software in place so businesses can deal with their FCA obligations with a high level of automation.

“We will act to address harm” – FCA

The FCA has been paying close attention to the car trade at both franchised and independent levels, especially around the selling of credit and the commission earned on it. At the end of a two-year investigation, it found that some dealers were overcharging unsuspecting customers, or not fully explaining how much they would be paying over the term of the contract, in return for higher commission from the lenders.

Earlier this year Jonathan Davidson, Executive Director of Supervision – Retail and Authorisations at the FCA, said:

“We found that some motor dealers are overcharging unsuspecting customers over a thousand pounds in interest charges in order to obtain bigger commission payouts for themselves. We estimate this could be costing consumers £300 million annually. This is unacceptable and we will act to address harm caused by this business model.

“’We also have concerns that firms may be failing to meet their existing obligations in relation to pre-contract disclosure and explanations, and affordability assessments. This is simply not good enough and we expect firms to review their operations to address our concerns.”

For more information about ClickDMS, please contact the Clickers via [email protected] or alternatively, call 01782 478 220!

End-To-End Digital Journey Fast Becoming The Norm

ClickEngage
So many retailers have geared their dealerships to take buyers on a fully digital sales journey which they mirror when buying that a fully online and end-to-end business model is fast becoming the norm.

Buying and retailing online has transformed the used car industry in recent years to the extent that many dealers can have a 24/7 virtual showroom and source their stock without – in theory – needing to leave the premises.

Increasingly sophisticated customer-facing platforms will now walk potential buyers through the entire process to the extent that the only time a physical meeting is needed is at the handover. At the same time, it is becoming ever easier and more automated for retailers to source stock, reply to an online enquiry, display and provide the relevant vehicle information and conclude a deal.

One remarketer, 1link Disposal, a partner supplier to the Independent Motor Dealers Association, said the growth of a fully online business model has been so fast and widespread that it could have reached a tipping point this year.

Vicky Gardner, head of remarketing, said:

“We know that use of digital continues to grow. However, what is interesting about the last few months is that there appears to be more interest in not just acquiring stock online but also digitally retailing as much stock as possible. Fully, end-to-end digital processes are becoming much more common.

“This is being driven by a number of convergent trends that mean we could be reaching a tipping point. Digital stock acquisition and digital retailing systems have now reached a high level of maturity. The chances of encountering significant problems in buying used cars and vans and then selling them – all online – are now low.

“Additionally, margins remain under pressure for retailers and end-to-end digital processes are cheaper to operate than traditional routes. This makes them very attractive at the moment.”

However, customers and dealers are not quite ready to embrace digital 100% and a physical presence will still be needed to cater for walk-in customers and those who want the reassurance they are buying from a reliable business.

“While more and more used car buyers are comfortable with buying online, it remains important for most retailers to maintain a high level of physical presence. Most car buyers in 2019 want to undertake a mixed digital and physical journey, and retailers must maintain the ability to meet that need.”

Her comments echo those made last week by Auto Trader which said that dealers need a blended approach with a strong online presence while still retaining a showroom but highlighted a shift in consumer buying habits, especially among the under-35s, who are confident spending online.

For more information about ClickDMS, please contact the Clickers via [email protected] or alternatively, call 01782 478 220!

Click DMS can help you maximise the potential of your customer data and manage leads

DMS DATA LEAD MANAGMENT
It’s important to record your leads and customers digitally in this day and age for a number of reasons. Not only is your data protected from things such as fire, theft, or a computer crashing but the ability to utilise this data is much easier when it’s available to you at the push of a button from at home, or away from the dealership, in a safe online system.

If you are not using a system like Click Dealer’s to store your customer data, it will most likely be kept in a Microsoft Excel document, where you will not be able to do much with it other than add, copy and paste customer details. Click Dealer’s Customer Database offers so much more.

With Click Dealer, you can keep all of your information safely housed in one place in your DMS. Our database is not just for storing customer details, it also acts as a marketing tool, enabling dealers to communicate easily with their customers via physical mailshots, text messages, email campaigns and soon, video campaigns.

This eliminates the need to use multiple sources to send out marketing communications to customers because everything is in one place, which will save you valuable time. You can simply select your method of communication and seamlessly send messages to your customers without having to go through the time-consuming process of copying and inputting their contact information manually.

Lead Management

The DMS is also a great tool for inputting new customer data and tracking the progress of a customers sales journey. How often are enquiries scribbled down on a scrap of paper, on a whiteboard, or simply just taken to memory? Do you have full visibility of what deals your sales team are working on and the stage they’re at? Well when you log your enquiries with ClickDMS, not only are they safe, you can monitor their progress and see which vehicles have leads attached.

When the lead converts to a sale, the details are automatically entered into your database. At this time we’ll automatically send them an email asking them to opt in to receiving marketing emails such as when the finance is expiring or a service is due. This way you can easily send out communications with the customer at a convenient time to maximise the chances of retention, whilst also not needing to worry about GDPR.

For more information about ClickDMS, please contact the Clickers via [email protected] or alternatively, call 01782 478 220!

 

Click Dealer Wins DMS Provider Of The Year At Car Dealer Power Awards 2019

DMS Provider of the Year

Dealers Need A Digital Rewiring To Keep Pace With Industry Trends

Digital sales
Dealers need to carry out a `digital rewiring’ of their business to keep pace with the shift in customer buying trends and the most successful ones will adopt an omnichannel approach.

This means they will provide the option of buying entirely online as well as from a physical visit or anywhere in between as they give an end-to-end service to maximise their market presence and the chance of a sale.

A new report by Auto Trader spoke of dealers needing to look again at their internet presence and what their websites offer browsers so that the current imbalance between the business’s investment and operations dovetails with how and where drivers look for their next vehicle.

In its report `The Future of Car Retailing’, it said a study of 2,000 consumers revealed that nearly half (45%) would already be happy to complete the whole purchase online if buying on finance. This increases to nearly two-thirds for the younger generation of buyers (18 to 34-year olds).

On the other hand, while the average number of retailers visited has reduced from five to just two, the dealer and the human interaction between them and a potential customer retailer remain key. It says three in four consumers wouldn’t buy a car without speaking to a retailer.

 Retailers will need to provide a blended experience for consumers

Nathan Coe, Auto Trader’s CEO-Designate, said:

“Dealerships will remain central to the world of automotive retailing, but they will have to evolve as the one size fits all approach is fast becoming redundant. Retailers will need to adapt to provide a blended experience for consumers so they can choose the right journey for them, be it online or offline, or any combination of the two.

“The future is about digitizing the ecosystem to enable retailers to move to a less labour and property intensive model that better serves car buyers. Successful retailers will embrace technology, invest equally in their online platform as they do their physical one, and re-evaluate the physical elements of their cost base to run more efficiently.”

Coe said the advice applies to independents operating in the used car sector just as much as franchises, adding:

“There is a huge opportunity for independents to utilise their agility and size to adapt to local market conditions, making use of their flexibility when it comes to product choice and operating approach. Their size also allows independent retailers to explore different avenues at a faster pace.”

The report identifies that the introduction of online payments and the shift to an omnichannel retail model is part of a broader need to make the entire car buying experience more efficient and this needs more digital investment.

For more information on Click Dealer’s services, contact The Clickers on 01782 478220. You can also reach us via [email protected] or through our contact page.