After unprecedented demand for new and second hand vehicles following ongoing supply issues, the cost-of-living crisis is now forcing a slowdown of car sales – which could have an impact on motor traders working in garages and dealerships. Striving for greater efficiency in the sales process, combined with helping customers see the potential for long term savings, is now increasingly important.
Data from eBay Motors Group’s Consumer Insight Panel showed that one in five new and used car buyers will delay their next purchase. The 3000 strong group was surveyed after Ofgem’s cap on energy costs was increased – demonstrating how rising bills is affecting consumer behaviour in the motor trade.
With 23% saying they will postpone their next car purchase, nearly a third (29%) will now buy a cheaper car and 20% will look for a smaller model, with the figures showing that overall the rising cost of petrol and diesel will make an impact on the choices of 70% of buyers. 
These responses are backed up by data from iTrackLEADS, experts in automotive lead management, which revealed that overall consumer enquiries dropped by 23%, test drives by 21% and overall sales of new and used vehicles by 14% in May 2022.
So what does this mean for dealerships going forwards?
One of the challenges comes from the continued upward trend in vehicle pricing. Since the start of 2021, used car prices have risen by nearly 30% and, while prices are expected to stabilise this year, they’re still tracking upward. This is due in a large part to the ongoing supply chain issues and shortages that have yet to settle down following the aftershock of the pandemic.
High prices, combined with the cost-of-living crisis, can help explain why more buyers are delaying their purchases or changing the type of car they want to buy. For dealers, this means they should consider focusing on how they can help potential customers to understand how the cost of a new car can be balanced with their rising bills. By leveraging their knowledge of different car models, sales representatives can advise on purchases where the running costs are more suitable for a customer concerned about the cost-of-living.
The good news is, dealers are becoming more efficient at closing sales. iTrackLEADS points to data showing that the number of lost sales fell by 40% in May compared to the same month last year . This demonstrates resilience, as new approaches are being adopted to make the most of every lead – helping dealerships to drive up efficiency and keep business turning over.
This is particularly important in today’s challenging climate. Since the pandemic began, motor traders in the vehicles sales sector have been on a rollercoaster driven by lockdowns, supply chain issues and pent-up demand. While these supply problems continue – with no clear end in sight – adapting processes to make the most of every lead and encourage customers to understand the affordability of their purchase through a detailed and holistic approach can give dealerships the edge they need to keep going through the latest cost-of-living crisis.
At Aston Lark Motor Trade, we find competitive prices for dealerships and garages, so businesses can stay protected during hard times like these. With policies starting from £1700 and experts on hand to help, get in touch for a bespoke quote – and one less thing to worry about.
Speak to our specialist motor trade team today on 0330 008 4960 or email [email protected] to find out how we can help save motor traders money on their insurance premium.
Don’t worry if a new insurance policy is not due soon, just fill in the next renewal date on the form here and we will get in touch closer to the time.