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Focus on used car profitability as volume drops

Dealers need to target increased used car profitability as scarcity of used car stock hits volumes.

“Dealers are going to find it more and more difficult in the next few months to find the stock they want to sell at the price they want to pay, which will unavoidably have an impact on the windscreen price,” said RAC Warranty sales and marketing director Ian Simpson.

“All of this means that dealers will almost inevitably sell fewer cars in the medium term until stock levels start to recover, although the extent of the problem is difficult to predict, as is the point in time at which stock levels will start to recover.

Simpson said to offset lower volumes, dealers need to look at ways at increasing profitability by ensuring a properly structured sales process is in place to take customers through each element of the used car sale.

Point of sale products

Dealers must offer point of sale products ranging from warranties to paint protection in a manner that demonstrates advantages and emphasises value-for-money.

He added: “Certainly, our experience during the recession is that customers have become more receptive to products that provide a large degree peace of mind, something that has seen our warranty sales rise by about a fifth in the last 12 months.”

 

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