The first three months of the year put a smile back on the face of most dealers. Demand has been strong, in used cars as well. In fact, many dealers are reporting stock shortages as good quality, ready-to-retail cars are in short supply.
The signs were there at the start of the year – low interest rates, a pre-election Budget and plenty of pent-up demand after a terrible final quarter in 2000. Even so, after the pain of the past 12 months, it is wonderful to see customers back in the showrooms again.
Not surprisingly, the industry is keen to make the most of the situation. That means maximising the profit potential of every deal while still remaining competitive in the market place. It means not letting a single customer walk without making sure they understand the comprehensive sales, finance and aftersales package dealers are able to offer.
In the everyday hurly-burly of running a dealership it is easy to lose track of rising customer expectations. The experience of the past 12 months has taught dealers to be more cautious, more careful and better informed before they even enter the sales process.
This is a fundamental change which the industry needs to react to. The traditional sales approach may no longer be appropriate for a customer who has already decided the car they want and where they are going to get their finance from. A new, more informed and more advisory role may be more suitable.
At Lloyds UDT and Chartered Trust we are watching these changes with great interest. Within our joint product range, we are flexible enough to react to the changing needs of new and used car buyers. Through dealers, we are able to provide the advice and motor finance they are looking for.
One current trend is the increased interest in comprehensive advice and finance packages for drivers coming out of company cars. These customers will want more than just a new set of wheels – they want worry-free motoring at a fixed cost backed up by a complete maintenance and support package.
There is much confusion in the company car market at present. Everybody is aware of the benefit-in-kind tax changes which are coming next year but few yet have a clear vision of what effect they will have. So, customers need advice and help.
Some will get it from their company car fleet manager. Some will read about it in the press and make up their own minds. Some will come into a showroom looking for answers.
Dealers should not let them 'walk'. This is a clear case where the well-informed car retailer has a distinct advantage over other lenders and a wider product range to offer. Banks, building societies and other direct finance providers are not interested in protecting residual values, offering service contracts or courtesy cars – you are.
Staff at dealerships should make sure they understand the new tax changes. Sales teams need to know the value of spending time with customers and understanding their needs. Above all, dealers must make sure they are exploiting every advantage in their market.
If they need help, the combined resources of Lloyds UDT and Chartered Trust are at their disposal.