6:30 am, May 21, 2022
The agency sales model for new cars is going to have a huge impact on the used car sales sector – and could even be more profound than the transition to online used car trading.
That’s according to MotoNovo Finance, whose commercial director Debbie McKay said: ‘We have seen the impact of new vehicle shortages over the past two years, with franchised dealers pivoting to increase their focus upon used vehicle sales.
‘I expect the advent of agency models will sustain this focus. The impact could be more significant than the well-publicised launch of online used car retailing.’
She said the current over-arching principle of agency sales is an online/offline model, with the manufacturer interacting with customers digitally and taking responsibility for orders, pricing and payments.
Dealers then take care of the offline test drive, part-exchange and vehicle handover elements.
The aim of the agency sales model is to remove time, cost and variation – notably vehicle pricing – from the equation.
But while there are still legal issues, agency models will also likely further shrink the established franchised dealer networks for brands adopting the model, said McKay.
MotoNovo Finance commercial director Debbie McKay says the agency model for new car sales will also have a major impact on the used car sector
As such, many existing dealers and dealer groups wanting to control their destiny will continue shifting their focus towards used vehicles.
And that means an opportunity for the used vehicle sales sector to reimagine itself, said McKay.
‘We’ve already seen the emergence of used vehicle sub-brands from established dealer groups aiming to combine franchised credibility to their used operations.
‘While free of franchise standards, these sub-brands are designed to leverage the credibility and inherent value of a franchise-type proposition.
‘There are implications for traditional independent dealers for whom it will mean further evolution.
‘I’m sure many will lift their game as they did through successive lockdown challenges.
‘The opportunity to package their service and agility attributes to add a new level of trust and relevance is there. As we see in other markets, great service can command a premium.’
