The devastation of the world’s financial markets is causing severe problems for finance companies servicing used car point-of-sale finance. In turn dealers – both franchised and independent – are finding it ever more difficult to place used car finance business.
However the Sewells’ Used Car Finance House Survey 2008, just published, found that dealers are still quite satisfied with their used car finance companies.
The Sewells’ Used Car Finance House Survey 2008 is the eleventh running of this primary research survey since 1996. Based on responses from 756 franchised dealers and 228 independent dealers, the Survey focuses on dealer satisfaction with used car finance companies.
Despite extremely challenging conditions, dealers awarded an average satisfaction rating of 77.2% compared to 78.0% in 2007. It would seem that dealers understand the tremendous pressures faced by finance companies.
Included within this year’s investigation of the used car finance market were questions designed to explore:
If respondents have changed their used car stock profile and how
The survey found that 53% of franchised dealers and 75% of independent used car dealers are having more proposals turned down than twelve months ago.
This is despite more than 100 finance companies and brokers being mentioned this year – a clear indication of how hard dealers are trying to place business.
Over 80% of franchised dealers and 75% of independents reported that enquires for used cars are down compared to twelve months ago.
Inevitably this means lower used car sales in 2008 and 63% of franchised dealers respondents estimated their used car sales would be down an average of 19%. A larger percentage of independents – 75% - said their sales would be down an average of 24% this year compared to 2007.
In response to the downturn, 54% of franchised dealers and 61% of independents are changing their stock profile. Both sectors were in agreement about their stock profile strategy - smaller cars and/or cars with smaller engines was the most popular choice.
Second choice was cheaper cars. One surprise was that 11% of franchised dealers said, quite simply, that they are stocking fewer used cars, but not a single independent mentioned this.
Why you need this research
The UK's leading finance houses and vehicle manufacturer finance houses have subscribed to previous Sewells Finance House Surveys, and they tell us that these surveys have been essential to their decision-making processes because:
It is primary research comparing the performance of all finance houses at the same time on the same basis - something their own in-house research cannot supply
The Sewells research is independent and thereby extracts honest and unbiased views from dealers
The research polls dealers' principal and secondary used car finance houses, and includes market share data - all of which enables subscribers to shortlist direct competitors
From the prioritisation of dealers' needs, finance houses can identify cost-effective ways of increasing dealer satisfaction, which in turn increases market share. (The Sewells Finance House Surveys have proved beyond doubt that dealers place more business with finance houses providing the best relationships.)
Further to the last point, subscribers tell us that by comparing their own and competitors' performances in the highest dealer priority areas they can design strategies to defend their own market share and attack competitors' market shares
When considering new market strategies, subscribers use the research to test the need in the marketplace, which can save huge amounts of expenditure on projects simply not required by dealers
Dealers priorities often reflect consumers priorities, which is an invaluable insight in a fast-moving marketplace.
