Nobody wants the hassle

There appear to be increasing numbers of people deciding that car ownership has just simply become too expensive. What with the rise in VAT, ever increasing fuel charges, retail price hikes and even rises in the cost of insurance and vehicle excise duty has meant that many people have just decided enough is enough.

The new car sales figures for January will shortly be published and the inside view is that they are likely to be ‘off the pace’ to use a trade term. Although many franchised dealers are reporting healthy sales of used cars, profits have been affected by the economic situation and even though the first quarter is acknowledged to be one of the best times in the car business there is lots of work to be done to improve the situation for the remaining 2 months of q1.

For car buyers looking to change there will of course be some huge incentives to entice them into parting with their money in buying a new car and this is likely to become far more prevalent the longer as the quarter continues to see new car sales struggle.

The situation regarding used cars of is somewhat different. It is clear that dealers are being cautious in how they value customer trade-ins because the auctions are starting to see a distinct lack of vehicles going through their sales. However the “we buy your car” outlets continue to take in cars from buyers desperate to get as much cash as possible for their existing car and not take a chance on what the dealer might allow them.

Interestingly in conversation with a sales manager recently he was quiet surprised at what he thought was a return to how it “used to be” with more buyers coming in without a car to part-exchange and asking ‘what’s the best deal for cash?’ which hasn’t really been relevant in the UK apart from when it comes to lower priced cars for many years.

This could mean that potential buyers are becoming comfortable with the ease in which they can now dispose of their current car and are happy to negotiate on the car they wish to buy rather than become distracted by what the dealer offers them as a cost to change. For many people they have the cash from their old car and therefore know exactly how much they will need to part with to get a new one even if, as many of us know they, haven’t necessarily been given the best price for the car.

This of course demonstrates the fact that if buyers are happier to sell their car before trying to buy another, car dealers need to be far more proactive in how they handle the very delicate situation of someone’s existing car. As we know many of them can be very undesirable in today’s market.

We have watched several big petrol engine low spec cars make a fraction of their ‘book’ value due to not only being uneconomical but very costly to tax and insure and there is generally an equivalent which performs just as well but at much lower cost to maintain.

So it is not always the price that is offered for a car but the process a customer has to go through to be offered a price.

There is no denying that many car buying companies are very good at making the process look easy and professional and because they have seemingly no vested interest in selling the enquirer another car, it somehow seems like a ‘true’ price and therefore much easier for a seller to believe.

It is a numbers game and they have to buy their fair share of rubbish but if car dealers could create the same kind of trust that is clearly (if seeing the amount of cars being sold to the these ventures is anything to go buy) then they would give themselves a strongly competitive edge whilst at the same time ensuring that the customer drops of his old car and picks up his new one with the minimum of hassle.