LOW numbers of quality used car sales in early 2011 will see dealers look to maximise profits says RAC Warranty.
The firm predicts that quality used car stock shortages throughout the first part of the New Year will see more dealers make further moves to concentrate on maximising aftersales profitability.
RAC Warranty says that it is seeing dealers who do not employ structured aftersales processes such as warranties and service plans are working on putting them in place.
Ian Simpson, sales and marketing director, said: ‘This is really a continuation of an existing trend. Quality used car stock is in ever shorter supply and is subsequently becoming harder to obtain and ever more expensive. Ultimately, this means that used car dealers will have fewer cars to sell and they must maximise the profit from each unit.
‘Many dealers, perhaps now the majority, have already put in place a structured sales process designed to make this happen but we have seen greater numbers follow this path in the last part of 2010 and into the New Year.’
Simpson explained that dealer thinking was to ensure that all parts of the aftersales portfolio were properly presented to the customer and their advantages fully explained as an integrated part of the used car sales process.
Where RAC Warranty worked with dealers on warranty and service plans processes, sales of these products often increased by 30 per cent – good news for dealer profitability and customer retention opportunities.
Simpson said: ‘Treating aftersales products as a core part of the used car sales process is something that will be crucial in 2011 if dealers are to maximise profitability. The economic climate remains difficult and, because of this, customers are receptive to products such as warranties and service plans that help to insulate against unexpected costs.’