British car-buying habits have changed, make no mistake

Uncertainty over the future of PCP commissions means sales teams should turn the spotlight on the upselling of accessories.


Today, more than 80% of new cars bought privately are acquired via personal contract purchase (PCP), which is, essentially, a form of leasing dressed up as a more flexible alternative to hire purchase.

Those affordable monthly payments are perfect for getting bums on seats and also for buyer retention, as it means customers will be back across your threshold by the time their PCP agreement expires. Indeed, this can often happen sooner if customer trends continue as they are. Almost half of all PCPs now end before their full term as customers come back looking for a deal on the latest and most up-to-date models.

Never has there been a better time to encourage your customers to protect what they’ve got.

In a car market that’s, at best, challenging, this is good news. But new regulations due to be introduced by the Financial Conduct Authority (FCA) following a review in October 2019 look set to ban dealerships from receiving external commission on certain types of finance to prevent them acting “against customers’ interest”.


That is, of course, an ethical and wholly understandable approach, but also one that will potentially impact on the motor trade. Sales staff will lose incentives that may previously have formed part of their day-to-day income and what that means is that car sales are likely to return to more traditional ways of doing business.

By that we mean the traditional upsell – once you’ve got the customer to try the car for size, that’s where the real art of selling begins. Upselling specification is great – it will help increase the margin on the car – but it is accessories, such as paint protection and service plans that will be the real sweeteners in the sales executive’s pocket. All can be sold at source and with a clear and transparent way of tracing the return on investment.

It’s in the customer’s best interests, too. Add-ons such as floor mats, mud flaps and, of course, Autoglym LifeShine, are investments into the car’s residual value as much as they are an extra cost for the customer. They can often be balanced against margin to help enhance the deal. And, by protecting their cars from the minute they leave the showroom, customers are helping themselves when it comes to avoiding punitive return charges at the end of the PCP.

After all, in a PCP, the customer doesn’t own the car unless, of course, they make a balloon payment at the end. Only 20% do.

When pared down, for the majority, it’s a form of car rental, and if the car comes back with scuffs, scrapes, worn carpets or paint damage it often falls to the customer to pick up the tab.

In the days of decent commission paid out on finance packages, some dealers may have taken more of a laissez-faire approach to return standards so as not to sting the customer who was about to pay good money by changing to a new car.

But this is something that’s going to change and will do so very quickly.

Never has there been a better time to encourage your customers to protect what they’ve got.

For more information about LifeShine, call us on 01462 677766 or visit us online.


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