BLOG: Has your dealership seen an influx in part-exchanges? - NextGear Capital Ireland
The 1st of March saw the new ’16 plates begin to roll out on vehicles across the country. The influx of these vehicles has meant an increase in people part-exchanging their vehicles for a newer model, but what does this mean for dealers? What should your stocking focus be on in order to optimise sales?
A recent study on consumer habits when purchasing a vehicle found that 35% of people part-exchange their vehicles. Given that over a third of your potential customers are part-exchanging their used vehicles, you need to be focusing your marketing efforts and dealership goals to meet their needs. How are you showing the latest vehicles on your forecourt? Are you marketing your part-exchange options to customers so they know they can count on you?
Between November and January this year there was a 62% increase in people requesting valuations for their vehicle, a clear sign of customers looking to make an informed decision on whether to part-exchange or not. When they’re considering exchanging, you want to ensure your dealership is stocked and ready.
Looking back to the 65 plate
You may remember us sharing tips on how to prepare for the plate change – so what was the impact on your dealership when the plate change came in?
Paul Hill, chairman of the NAMA predicted a “significant increase in the volumes entering the market” that would build through the month of September. Although there was pressure on the value of the late plate vehicles, the used car market was prepared to handle the influx of part-exchange vehicles in September and beyond.
It appears the plate change benefited the market in every way, as almost every market sector, including part-exchange, saw sales prices grow on the same month in 2015. The Finance and Leasing Association released figures which indicated a 6% rise in the value of financial advances for the purchase of vehicles, which now stands at £508,527,000,000.
This means more consumers are willing to buy, but is your dealership stocking enough of the right vehicles to make the most of this opportunity?
Trends in the run up to the plate change
What do the latest figures suggest about the impact of the plate change? What’s interesting here is that the CAP clean price rose from 96.5% to 99.03%, suggesting there is more willingness to spend on the right vehicles. The fluctuations in vehicle value around the plate changes are not as significant as they have been previously.
Indeed, Year-on-Year values show that part-exchange vehicles remain ahead by almost 6% with this rising to 6.5% at Manheim, which suggests that buying the right stock is key when making a purchase. The National Association of Motor Auctions saw the value of younger part-exchange vehicles increasing by 9.1% while the older ones increased by 6.8% between 2014 and 2015.
Still the average values did see an overall rise in January and February because of the reduced stock on the market. With the influx of wholesale stock and Easter arriving early this year, it is thought that the value of part-exchange vehicles will start to fall. To make the most of every searching customer, make sure your social channels are optimised and ready.
With now being one of the best times to change gear in your dealership, are you stocking enough of what customers want? As Easter is just around the corner, why not spring clean your forecourt with the help of our tiered Stocking Plan?
Thanks for reading!