For those retailers digitally managing leads and tracking attribution, there’s a broad spread of options being employed. Believe it or not, more than a quarter of used car dealers are still using paper-based systems to manage leads. Built around a survey of more than 700 independent and franchised used car dealers and our annual Dealer Council meeting, the second-annual CarGurus One Voice Report examines the lead management challenge and how dealers are coping.
The Government has been vague about its future plans for diesel, petrol and electric car taxation and changed direction a number of times. For example, the plug-in car grant is evidence enough that authorities want us to drive cleaner vehicles, but it was downgraded by the Office for Low Emission Vehicles in November 2018, so the allowance is now lower and applies to a smaller number of cars.
Equally, the Government has yet to make any announcements about its plans for company car tax beyond April 2021, leaving companies and business drivers in the dark, while continued bad publicity around diesel has caused speculation as to whether or not it will be subject to further tax. Put simply, we just don’t know, and the ambiguity is also affecting the used car market.
The used car market is one of a long list of sectors that have been upended by the internet, and the dealers with the best-run and most profitable operations are those that embrace it. According to CarGurus’ One Voice report, 73.2% of used vehicle retailers have adopted digital strategies to boost their businesses.
The savage supply and demand issues at play in the used car market have increased pressure on margins, and we’ve talked before about just how hot the competition is for good quality second-hand vehicles.
It’s no surprise, then, the research we conducted as part of our One Voice report revealed 43.8% of used car retailers were seeing their margins decrease – significantly more than the 25% reporting an uptick – and there is a number of reasons for the squeeze.
It’s absolutely no secret that retailers have turned their attention to the used car market over and above the new car market. After five years of growth and a record-breaking 2016, new car registrations turned on their heels and fell by 5.7% and 6.8% in the successive two years, which steered retailers toward what continues to be an exceptionally strong second-hand vehicle market.
The trouble is that used cars have been hot property for a long time; prices are extremely strong, the trade can’t get enough of them, and even in the wake of previously strong new car sales, competition is so fierce for quality second-hand stock that it’s proving ever trickier to procure. That’s great news for auction companies, less so for trade buyers and, in short, it’s the perfect storm of supply and demand.
It’s easy to forget just how much influence the Government wields over car buyers’ decisions, but it’s absolutely enormous. It may be subconscious to a customer, but the country’s authorities impact their choices at every level, be it financial, technological or geographical, and the more in-tune retailers are with customers’ needs and concerns, the better their chances of a sale. Here, we investigate how four government trends are impacting car buying in the UK.
CarGurus’ inaugural One Voice Report, released today, brings together the opinions of more than 400 influential UK dealers on hot topics affecting the used car market. It touches on rising overheads, increased competition, government issues, and more, and provides valuable insights into how digital is helping dealers adapt to today’s changing market. Key findings include:
Headline first quarter car sales figures look disappointing, but they mask a more nuanced story and lots of interesting insights for dealers
As many dealers will be aware, first quarter used car sales figures issued by the Society of Motor Manufacturers (SMMT) showed a decline of nearly 5% compared to the same period in 2017.
The headline figure looks like a blow, but the wider picture is far less negative. For a start, it’s worth pointing out that although 5% is a significant fall, there were still over two million used cars sold in the first three months of 2018.
On top of that, the decline was not across the board. The detail behind the headlines—and in supporting evidence from other sources—provides some telling insight that proactive dealers can use to their advantage.