iVendi has outlined a five point plan to help dealer maximise their online presence as the used car market begins to lose growth momentum.
Darren Sinclair, iVendi CCO, said that while the used car sector remained quite buoyant, the market peak had now probably been passed, caused by factors such as the cost of living crisis and more competition for spending as the pandemic hopefully came to an end.
According to BCA, wholesale used car values declined by 5.9% in March.
Sinclair explained: “We’re hearing a chorus of voices – ranging from industry experts to anecdotal evidence from dealers – stating that values and prices are falling after several years of growth. This had to happen sometime and it seems that time is now.
“So far, it doesn’t look like a dramatic correction, more a relatively gentle realignment of supply and demand caused by a combination of issues ranging from pressure on personal finances through to slightly increased stock availability.
“Several of the dealers with which we work have been talking to us about modifying their digital approach to adapt to these changing conditions and we’ve gathered our headline thinking into this five point plan. It’s designed to help dealers rethink how they are using technology to create sales in a more competitive market where consumer concerns and behaviour may be now shifting noticeably.
“Much of it is based around how likely changing consumer preferences and behaviour are likely to develop over the rest of 2022.”
The iVendi plan advises:
- Do more with each sale
Ensure your technology allows you to maximise the revenue from every unit. In the real world, that means covering key aspects of the customer journey such as finance, the part exchange and value added products such as warranties and service plans. There are proven strategies for making these elements work online and in the showroom, and all dealers should now be employing them.
- Re-examine your proposition
Does your online proposition still match consumer needs in a changing market?
Car buyers will now be more concerned about the potential reliability of their prospective purchase and the protection provided if things go wrong. This means emphasising elements of your proposition such as the service history and the warranty, with the latter potentially needing to be upgraded or lengthened in response to consumer expectations.
- Emphasise monthly affordability
With the cost of living crisis, many customers are becoming much more price sensitive in the lower and middle market. The high windscreen price of many cars is a genuine disincentive and dealers should ensure that the affordability of each vehicle is underlined by showing relevant finance examples that promote monthly costs.
Runnings costs are back on the agenda
Another effect of the cost of living crisis is that car buyers are becoming more aware of the day-to-day cost of keeping their vehicle on the road, whether that means fuel economy, low vehicle excise duty or long service intervals. Making these features a prominent part of your vehicle descriptions and your vehicle search will help consumers to find a vehicle that meets their financial needs.
- Make buying easy
Now that the pandemic is hopefully fading, consumers are once again being presented with a wider range of spending choices. It is likely, for example, that they may be deciding between buying a car or taking a holiday. Part of the solution to this is to make your digital car buying journey as easy as possible, something at which the new digital disruptors are very good - but which can be matched by any car retailer.
Sinclair added: “One of the lessons of the car market at the start of the pandemic was that those dealers who recognised the changing conditions and responded by changing their digital approach accordingly were those who thrived.
“Our view is that the same is now happening again. We can already see that those dealers in our customer base who are adapting their use of technology are those who are maintaining a higher level of success.”