The first three months of the year have been more hectic than many can remember. After months of worrying about a lack of customers the sales rush has been a welcome respite for dealers genuinely concerned about their long term future.
January sales were up. Customer confidence returned and forecourts cleared of over-age stock. But there was barely time to draw breath before March and the Y-plate market was upon us.
After two years, buyers are beginning to get used to the idea of the double plate change but still wait until the last minute before coming in to buy. The result is more advertising and more sales concentrated into a shorter period of time.
During such hectic times it is all too easy to take your eye off the ball. Some dealers may reach the end of this first quarter having shifted a lot of cars but may not have made a profit. There is still downward pressure on prices, customers are looking for a bargain and margins remain dangerously low.
In the rush to get orders confirmed and cars off the forecourt, sales staff may not take time to sell products which could boost the bottom line. Far too often it is easier to close the sale and move on rather than distract the customer with a finance package or personal protection insurance.
Dealer managers need to ensure the reward packages for sales staff are balanced to take account of both the turnover from shifting the metal and the profit from F&I. This is not a new problem but one which requires constant attention.
An equally familiar problem is emerging this month for dealers after their success selling new cars – what do they do about the compound full of part-exchanges?
Some will be sent straight to auction, but many will be ripe for retail and it is important to have a proper strategy in place to take maximum profit.
Finance will play a key role. Indeed, there is often more freedom to offer tailored finance packages within the used car market than the new. Lloyds UDT and Chartered Trust have a full range on offer, from traditional hire purchase through to more complex personal contract purchase and leasing.
New car buyers are used to seeing vehicles priced on a cost per month basis but how about bundling used car finance packages to suit particular customer groups – used PCPs for those opting out of company cars and taking compensation packages, or leasing packages for local businesses.
Take time now to look around you and check how competitive you are against direct lenders. Then set out to challenge those rates by being more imaginative and more proactive in the market.
The ability to structure effective reward packages and bundle used car finance is a fundamental skill in car retailing. Lloyds UDT and Chartered Trust have many years experience in these areas and your specialist account manager is always ready to help.
You can make full use of the support services we have available to boost bottom line profitability and make sure your dealership survives beyond the present healthy, but hectic, market. Do call us now.