With the current climate weakening returns on people’s hard earned savings, according to some commentators the car market may well be one of the beneficiaries of the situation. Although a quick click of a mouse will lead consumers to many ultra competitive dealer finance packages – when compared with very expensive bank loans and unsecured borrowing rates – they are still choosing to use their own money to fund the purchase of their next car. Many buyers have switched to used cars this year due to the major price reductions and the fear of losing thousands by buying new, however it is confidence in job security and the recovery of the economy which will ultimately lead buyers back to the showrooms and allow car makers and dealers to confidently build and sell new cars again.
Hard work and aggressive campaigns are beginning to see new car sales of some brands start to gather pace, but the threat of more bad news potentially around the corner is stopping the new car recovery gaining any real momentum. Despite the flaws in the scrappage incentive (and let’s face it there are plenty) it does appear to be doing its job in generating interest in new cars and from the reports we are receiving showroom footfall is definitely on the increase.
Dealers have reported great success so far this year with ‘cash converting’ customers i.e. buyers who come armed with their own funds already in place and are then convinced to take advantage of some great finance rates and packages offered by the dealer. This, of course, leaves many using their dwindling savings to meet the monthly payments but by knowing they will only make a pitiful return by investing the money it’s not that hard a decision.
With all the current furore around scrappage and what impact it will actually have on the new car market one thing is for sure, whether customers buy eco-friendly cars or not, they still want to buy a great car for a great price, and it seems certain that starting the research process on-line is a pre-requisite to actually deciding who, when and how they purchase their next car. This means dealers will need to ensure that their websites and online marketing are right up to speed if they want to gain (and maintain) the initiative in this shrinking car market.
That is if the marketing budget hasn’t already been completely decimated.