Car retailers must rethink their customer propositions to offer greater financial security to cash-strapped customers, according to RAC Dealer Network.
Lee Coomber, RAC sales agent director at Assurant, which partners with the RAC in the dealer and aftersales sectors, said car retailers need to identify ways of providing reassurance to customers who were being offered older vehicles at historically high prices due to stock shortages art a time that sees their personal finances stretched.
He said customers are looking for a high level of protection against the possibility of unexpected expenses, especially as they could be buying a car that is older with higher mileage.
The network recommends that dealers offer a more comprehensive and longer warranty, either as standard or as part of an upgrade path, alongside an additonal focus on service plans.
Coomber said: “It’s important to realise that, at times such as these, customers are very often actively looking and are willing to pay for higher levels of protection. Warranties are, to a great extent, a countercyclical product that often sees strong levels of sales during times when economic conditions are difficult.
“However, there are other important elements in rethinking the proposition. Ensuring that each vehicle is prepared for sale to a high standard, as well as emphasising the comprehensive nature of each service history, for example, also has a part to play. It is about providing as high a degree of reassurance as possible.”
Demand for GAP insurance quotes and extended warranties for alternative fuel vehicles (AFVs) is rising year-on-year (YoY), data from Intelligent Motoring has shown.
Coomber said the RAC Dealer Network was in discussions with members to examine ways in which their customer propositions could be modified and enhanced in response to the changing market, providing advice on the products offered, to training and sales analysis.
He said: “The common theme we are hearing from dealers is that motorists don’t want to be in a position where they are having to find large, lump sums and paying for servicing falls into this category. Service plans help customers to spread the cost of maintenance in a predictable manner over time.
“We’re in a position where we expect a large proportion of dealers to revise their proposition during the second half of the year as market conditions continue to change, and we’ll be working to support them through that transition.”