Used car prices also went up 8% in 2014. The Centre of Automotive Management at the University of Buckingham Business School gave several reasons for the increase in both the number of used cars sold and the average value of each of those cars sold by dealers which rose nearly 10% to reach £7,660. If you look right across all used car sales prices increased by 7.4% to reach £11,391.
Firstly, it is simply about a gradually improving economy giving consumers the wherewithal and confidence to go out and a buy a new used car. Secondly, there is now a better selection of ‘younger’ used cars out there, largely because new cars that were bought new up to four years ago (as the economy showed very early signs of recovery and the PCP financing boom took hold), are now coming onto the secondary market in volume.
The SMMT’s statistics on the age of used cars being sold shows that in the last year (December 2013 to December 2014) average used car vehicle’s age at point of sale fell by 5.6% from just over 4 years (50 months) to just under 4 years(47.2 months).
The BCA report says the numbers of younger used cars (the 0-5 year old cars) rose by 6.5% to reach 2.75m in 2014 so that they now make up about a third of all used cars sold last year. The shortage of these younger used cars is gradually abating. But will this mean that the rise in values that we saw last year will grind to a halt in 2015? It is too early to tell but Dealer Principals looking to do more Used Car businesses could do well to read the trends on Used Car sales in the comprehensive BCA Used Car Market Report 2014 TNS/BMRB.
In addition, the battlefield for used car sales now largely takes place online. Dealerships have worked hard on their websites and on building and updating their online vehicle listings. They are getting their used car stock spruced up quickly for photography and getting car details posted on their sites as quickly as possible now.
They are also investing in Search Engine Optimisation (SEO) and Pay Per Click (PPC) advertising and web re-marketing programs so when your put your Google request in for a ‘3 year old Golf TDI SE with 50,000 miles’ on the clock, their listing comes up ahead of others. There is a whole new digital marketing language emerging in the automotive space.
DPs are likely to be checking their VDP stats (Vehicle Details Page) views and H&D Lookups (Hours & Direction) page views just as much their CTRs (click through rates) and website visitor numbers - with the latter two indictors being seen as increasingly poor predictors of sales. There is no doubt that one key to increased used car sales is getting more active and savvy on the web.
This needs to be supported by rapidly offering those interested in your stock, opportunities to engage more deeply with you. A timely offer of a Live Chat on the website might be the opportunity to offer a test drive of the model and specification of car that most closely fits that browser’s search criteria. All this needs to be done in a highly sensitive manner to avoid being too intrusive while making it clear you are not only best placed to sell that used car but also to service it for them until it comes time to move onto the next, quite possibly new, car purchase.