Motor Trade Commercial Insurance Profile
Motor Dealers Advised to Focus on Financing Options
As the sales landscape in the motor industry continues to change, car dealers may need to reconsider how financing options are offered to potential customers. According to MotoNovo, dealers are under greater pressure to provide optimal bargains and financing for clients as the sales process has changed. With many transactions and showrooms having moved into a digital environment, customers have become more engaged and informed.
When conducting sales with customers in a virtual environment, dealerships should consider the competition that exists when it comes to financing for an eventual purchase. Prior to the coronavirus pandemic, it was common for customers to physically visit a showroom, sit down with a member of a sales team and discuss options. This may have provided dealers with an advantage in offering their own financing packages, but now, customers may be more prepared to access other options—such as personal loans—which can offer competitive interest rates while also being fully accessible online.
Shopping for vehicles online has created greater ability for customers to find a car that fits their specific needs. In addition, these customers can then easily take their research and apply it to online tools offered by loan providers. With these capabilities in mind, it is important for dealers to understand that consumers may have become more empowered to find the best possible bargain for a vehicle.
According to data from Dealerweb, orders for new and used vehicles dropped 18.3 per cent and 30 per cent respectively in February 2021 versus February 2020. Although those numbers were not as large as the 36 per cent and 45 per cent respective decreases in January 2021 compared with the previous year, it is clear that dealers must continue to consider all possible steps in order to maintain sales.
Finally, a December study by Volkswagen Financial Services found that the rate of people purchasing cars outright has dropped by 9 per cent. This means that more are buying on finance, which further emphasises the importance of these processes.
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