Understanding your local market and the stock you need is key to maximising car dealership sales, according to new research by CAP HPI.
The vehicle valuation expert’s latest analysis of transactional figures showed that if a vehicle is kept unsold on the premises for 12 weeks, the gap between the advertised price and the price achieved doubles. The gap was just 3.8 per cent in the first week but rose to 6.4 per cent by the end of 12 weeks.
Knowing your market and the type of cars customers in your locality are looking for always pays dividends. It’s also important to ensure you have the correct motor trade insurance policy to adequately cover both the volume and the value of cars you keep on the premises.
CAP’s latest research showed that almost half of dealers – 48 per cent – said their retained margins were down in July compared to June. Just two in 10 said they had improved in the period, and CAP believes that a better understanding of the local market and responsive stocking arrangements can help to boost the figures.
CAP’s retail and consumer specialist, Philip Nothard, said: “With concerns over a more volatile market it is important to make stocking decisions that keep your retail offer flexible. The research shows that sourcing the right vehicle, at the right price for the market, pays dividends.
“The data highlights the importance of understanding your brand, where you sit in the local market, what to sell and when.”
He pointed out that the differences in prices that dealers reported were not always due to how many vehicles were available in the local market, but in many cases depended on the type. Top executive brands, for example, tended to hold their prices better alongside some niche marques.