Putting the spotlight on used car sales
Exploring how dealers are capitalising on growth in the used car market
According to the latest Auto Trader Market Report, 2018 represents a strong opportunity for the used car market, which will be welcome news for dealers facing the challenges of declining new car sales, consumer uncertainty over diesel and a growing shift towards electrification.
Several factors have influenced the opportunity to sell more pre-owned vehicles, the most significant being the substantial expansion of younger and ‘late plate’ cars in the vehicle parc. This has been fuelled in the main by an equally substantial uptake in PCP-based finance products, based typically on a three-year ownership cycle. Auto Trader’s data supports this view with around 69,000 cars between two and four years old advertised in January 2013, compared to 93,000 cars of the same age listed in January 2018.
Growth in the second-hand market is also being influenced by changes in consumer attitudes. Auto Trader’s survey found that three quarters of people were considering buying new or used at the start of their car purchase journey. It also revealed that consumers were likely to opt for nearly new cars over brand-new, thanks to a wide selection of good condition, well-equipped cars available. For franchised dealers, this opportunity is further strengthened by offering manufacturer ‘approved’ used car schemes that include warranties and comprehensive vehicle checks. These have become increasingly attractive to consumers as they offer similar levels of protection to buying a new car.
As with new car sales, motor finance is the key factor that allows dealers to capitalise on the used market, particularly on the most recent stock. Last year, the Finance & Leasing Association reported that almost 90% of new cars were funded by their members, which lent nearly £19 billion to private buyers. A Personal Contract Purchase or PCP with its low upfront cost, convenience and flexibility, is the enabler when it comes to used cars. According to Auto Trader, over half of car buyers now consider the cost as a monthly figure, as opposed to its ‘on the road’ price.
LifeShine’s paint protection formulation now features colour enhancement technology to provide superior depth of colour, helping to return even used cars closer to their former, ‘as new’ paint finish.
As well as embracing the used car market by making finance products more accessible and transparent, dealers are also placing a greater emphasis on digital marketing channels to strengthen their pre-owned offering. For example, Bristol Street Motors has introduced what it claims to be the UK’s first purely web-based used car sales platform. The new ‘Buy Online’ system allows customers to choose from group stock of 6,500 used vehicles and complete a purchase in as little as five minutes if they have money in place, or they can arrange finance online.
In terms of digital marketing for the broader market, Facebook has an agreement with motors.co.uk which enables used car listings to appear in its Marketplace channel, allowing dealers to sell used vehicles on Facebook for the first time. Location settings in Marketplace enable buyers to find cars and communicate with local dealers direct, via its Messenger app.
Growth in the used car market also helps dealers to secure incremental revenue from finance and insurance products, accessories and paint protection. Autoglym’s market-leading LifeShine Vehicle Protection System (VPS) is ahead of the curve when it comes to paint protection, by employing the latest technology. LifeShine’s paint protection formulation now features colour enhancement technology to provide superior depth of colour, helping to return even used cars closer to their former, ‘as new’ paint finish. Tests carried out with four competitor products showed that the improved LifeShine product had a superior depth of colour difference of up to 31%.
To find out more about how LifeShine can benefit your business, call us on 01462 677766 or email firstname.lastname@example.org.
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