It’s ironic that given we are on the precipice of a terrible world recession which could mean complete meltdown with Greece the first to tumble, there are still cars which are not only selling well but are more expensive than ever.
This of course is not necessarily down to September being the 2nd biggest new car sales month of the year or that there is large scale pent up demand with loads of customers with bulging pockets. It is mainly due to the fact that buyers are dismissing usual factors which make up a buying decision in favour of practicality and economics.
Car buyers are no longer worried about the colour or the style but more how cheap they can buy it and what will it save them in running cots.
We are seeing many customers ‘trading down’ in order to get their costs down by running a more economical car but in some cases to get a lower monthly payment and perhaps some cash back.
Of course “small and economical” in a recession is not really a major surprise but given the lower sales of new cars over the last couple of years – masked by the effects of scrappage – on the used car market we are now seeing a real dearth of this kind of product in the market.
This then has the effect of raising prices so that buyers do not necessarily get the bargain they are looking for because dealers have to pay significantly higher trade prices to stock these cars.
There is however good news potentially on the horizon for car buyers and that is that dealers will have to re-double their efforts to attract new customers and retain their existing ones, so deals are likely to be more competitive than ever as dealers forsake margin for volume. Buyers are also more likely to be followed up after and during ownership as dealers make it their business to hang on to customers and encourage them through their aftersales operations.
The mantra is likely to be “little and often” rather than “smash and grab” as it is in some cases with buyers getting a raw deal and not being able to change because of the greed of the dealer in the first place.
If a dealer ensures that the buyer gets a fair deal and forsakes his margin to some extent then he has more chance of converting extra customers and seeing them more often.