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Franchised dealers' "golden opportunity" after claiming a third of the used car market

Franchised dealers have seen their share of the used car market rise to over a third, according to figures from the GIPA Drivers Study UK 2015.

Research from GIPA (Groupement inter Professionel de l’Automobile), released by Castrol Professional, suggests that franchised dealers are experiencing record sales of second-hand cars and are selling almost as many used cars as those sold by private sale.

The franchised dealer sector now accounts for 34% of all used car purchases (rolling average from 2012 to 2014), a dramatic rise from just 23% of the market by volume between 2006 and 2008.

By contrast, private sales have dropped from 41% of all used car sales volumes to 38%.

It is also bad news for dedicated second-hand car dealers, whose share has fallen from 29% to 21% from 2006 to 2008 and 2012 to 2014.

The contraction of new car sales during the recession has encouraged franchised dealers and manufacturers to capitalise on the additional revenue stream offered by second-hand cars, according to Castrol Professional.

By volume, second-hand car sales now account for 66% of the total number of car purchases (new and used, from all types of outlet), which has dropped from 72% in 2010 – with franchised dealers increasing their share of this market.

Castrol Professional believes that this development presents dealers with a further gold-plated opportunity to drive aftersales traffic and profitability.

Nigel Head, Castrol’s head of marketing, UK & Ireland, said: “When a new vehicle’s warranty expires, or when it’s sold second-hand to another motorist, many owners may subsequently take their vehicle to an independent garage in an attempt to cut potential maintenance and repair costs.

“Franchised dealers have shown they can capture a greater share of used car sales – they now need to grasp the resulting aftersales opportunity and work to develop a constructive and ongoing relationship with those who visit the dealership for a second-hand car purchase.”

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