How politics is changing car retail
The importance of asset protection in the Direct Debit generation
When it comes to politics, we are living in uncertain times. Both at home and abroad, many of the world’s leading economies face divided political systems and this is having an impact on consumer trends.
Automotive industry research in the UK has found that an unstable political climate is deterring 40% of consumers from committing to larger purchases. As more people are renting property than ever before, a preference for a fixed monthly cost is leading more prospective car buyers to opt for leasing instead.
Growth in the ‘Direct Debit Generation’ has exploded in the US car market to the point that over 25% of all private vehicles are now leased. In the UK, findings from BVRLA’s 2015 Car Rental survey showed that car ownership is highest in rural areas (90%) and lowest for renters in London (42%) and other major cities and their suburbs (56%).
The main reasons for leasing were affordability, in terms of a fixed monthly payment rather than a large lump sum and the attraction of upgrading to a new car every few years. What’s clear is that a whole new generation of drivers is preferring to fix their motoring costs in the same way that they would with other products such as their phone, broadband, insurance and gym membership, for example. By embracing the concept of leasing, consumers have switched onto the idea of gaining access to a new vehicle with the latest technology in exactly the same way that they would upgrade their smartphone.
With leasing, however, comes more responsibility on the part of the driver. There are prescribed limits on vehicle mileage and its end of lease condition is also taken into consideration. Penalties often apply to lessors where the dealer may have to carry out rectification work when taking back a car. In that sense, protecting the asset from the outset takes on a whole new meaning, as the dealer still owns the vehicle under a lease agreement. Encouraging the consumer to invest in a VPS prior to delivery offers peace of mind when drawing attention to their obligations.
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Since its introduction, LifeShine has proven to deliver the complete and most profitable VPS solution. Independent research has shown showed that dealers achieve, on average, increased penetration rates of 13% when switching to LifeShine from other suppliers. In the premium car segment, this figure has risen to as much as 80%, as car buyers acknowledge the heritage and quality associated with Autoglym.
As well as an increasing trend towards leasing rather than buying a new car, research has also discovered that consumers are spending more time in researching their desired vehicle. One survey, which asked 1,000 people about their online research and car buying habits, revealed that 39% spend over four months researching with 59% spending more than eight hours in total. A mixture of professional reviews (63%), editorial reviews (50%) and branded content (37%) were listed as the main sources of information.
Whilst visiting a dealership remains a vital part of the new car buying process, the overall deal provided by the dealer is unsurprisingly the most important element, although two thirds of consumers prefer to remain within 50 miles of their home. The results also showed that research continues whilst consumers are in the dealership with over a third of buyers (36%) using a smartphone.
As a result of doing their homework, it’s perhaps no surprise that motorists are more likely to make a purchasing decision more quickly with 68% stating they would be happy to put an order in less than a month after they’d completed research. The need for sales staff to qualify a customer’s needs accurately and connect with them early on in this process is therefore crucial in winning their business. By presenting special offers and value added products, such as LifeShine, dealers can build trust with customers, which hopefully will turn into a long-term relationship and referral opportunity.
To discuss how LifeShine can add value to your dealership, call 01462 677766 or email email@example.com.
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