Price wars on the horizon as car buyers become scarce

You know what? People tend to look closer at the condition of a car when times are quieter. Who knows why that should be but it definitely happens. Maybe it’s because there aren’t so many people around and the car buyer feels they can take more time. Maybe they have a sense that as a potential customer they are a rare breed and are deserving of special treatment. That is certainly the view from within the trade, and it is important that sales personnel are aware of this so as not to give a prospective buyer any reason to reject a car on the basis of condition.

In the car trade – and it is a good thing for customers –we have to keep stock turning. It is vital for our working capital and profit returns. The spaces used to sell cars on a dealers forecourt are pieces of prime selling real estate and need to be used as many times throughout the year as possible. If a car has been there too long, it isn’t selling for whatever reason and it’s taking the space of a car that could be sold for more profit so the price comes down and it gets moved on. In the trade it’s called wiping your mouth.

So it follows that if there’s a slowdown where buying customers are harder to come by, price wars often break out especially with models where there is far greater choice.

There will be a competition to become the cheapest on the net in order to be the dealer that gets the phones ringing first and although being the cheapest doesn’t necessarily always attract the customers (as we pointed out yesterday) being very competitive on price certainly does.

If there are potential buyers looking at changing their car right now it will be well worth looking at the net for comparison and at the very least using those prices as leverage to buy closer to home.

The interesting thing for the trade is that we have had tough times and the fittest will come out the other end in a stronger position.

Really it’s all about going back to basics, remembering the process and understanding how precious customers are at any time not just when there aren’t as many about.