About the author:
Andy McMorine serves as the Head of Sales at Marsh Finance, bringing an impressive 29 years of dedicated experience in Motor Finance to his role. His comprehensive background spans multiple segments of the industry, including Manufacturer, Prime, and Near-Prime sectors. Andy’s vast knowledge, honed through years of hands-on experience and strategic leadership, equips him with unique insights into the shifting landscape of the auto industry. As a thought leader in the field, he continues to drive innovation and growth in his position at Marsh Finance.
The Used Car Market
In a previous article published on Marsh Finance’s blog, we delved into the fascinating world of trends and transformations in the used car market – check it out here. That piece offered an in-depth examination of the evolving market dynamics and the implications for lenders, dealers, and consumers. Now, we are pleased to continue this conversation, armed with fresh insights from a recent report by iTrackLEADS. This new piece, much like a sequel to its predecessor, brings updated analysis and observations, spotlighting the continuing shifts in the automotive industry and illuminating the path forward. Read on as we interpret and explore these new trends, their implications, and the opportunities they present for stakeholders in the auto industry.
iTrackLEADS Report Analysis
An interesting development has come to the fore recently, as illustrated by the latest report by iTrackLEADS, indicating a consistent rise in dealer enquiries for the fifth consecutive month. This trend is noteworthy and provides both crucial insights and compelling opportunities for lenders, dealers, and consumers alike.
The growing wave of dealer enquiries suggests a resurgence of consumer interest in vehicle ownership. The automotive industry, like many other sectors, was significantly affected by the global pandemic, with plummeting demand and a disrupted supply chain. However, the recent upward trajectory in enquiries indicates a rebound is underway, fuelled by a combination of pent-up demand, increasing consumer confidence, and a preference for personal transportation due to lingering concerns around public transport following the pandemic.
In assessing the data, it’s essential to note that the increase in enquiries has also been driven by the used car market’s robust performance. The used car market has been benefiting from the supply constraints in the new vehicle sector, owing largely to the global semiconductor shortage. As new cars become harder to come by, consumers are turning to used vehicles, resulting in heightened demand and higher used car prices. The surge in used car prices, although a boom for dealers and private sellers, has implications for affordability, particularly in the face of the current cost of living crisis.
The cost-of-living crisis is indeed a significant factor to consider in our analysis. Economic uncertainty, rising inflation, and increases in energy and food prices are impacting consumer spending power. Yet, it is in these times that efficiencies and smart spending decisions become even more critical. The auto industry is no exception. As the purchasing power of many consumers is strained, the appeal of affordable financing options and the value offered by used vehicles increases.
Despite the uptick in dealer enquiries, we’ve witnessed a contrasting trend of test drives falling by 8%, sales dropping by 14%, and a considerable decrease in vehicle handovers by 40%. This seemingly paradoxical behaviour can be attributed to a confluence of factors shaped by the current market dynamics and consumer attitudes.
Looking Ahead
The market perseveres, valiantly grappling with rising interest rates. Yet, amidst these challenges, a silver lining emerges in the form of declining electricity and fuel prices. These trends offer notable advantages for consumers, particularly at a time when many are contemplating a shift towards more economically friendly car models. These cost-saving opportunities, coupled with a growing inclination towards affordable vehicles, paint an intriguing landscape for the auto industry and its customers alike.
The continuation of these trends could result in the further strengthening of the used car market, with increased consumer demand for flexible, affordable finance solutions. This offers an exciting opportunity for car dealerships and finance lenders to innovate and create consumer-centric products that address these emerging needs. By ensuring we meet these demands effectively and efficiently, we can help not only sustain but enhance the momentum in the auto recovery industry.
The current landscape of the auto industry is complex, shaped by global events and local economic conditions. The rising dealer enquiries and the robustness of the used car market are positive signs of recovery and adaptation. By staying nimble, focusing on efficiencies, and innovating to meet evolving consumer needs, we can navigate these uncertain waters and continue to drive the industry forward.
Unleash Your Dealership’s True Earnings Potential
As we navigate the intriguing shifts within the automotive industry, isn’t it time your car dealership moved in sync with these transformations to maximise profit margins? Marsh Finance stands ready to guide you along this path. As one of the premier car finance lenders with a unique offering of non-prime PCP and HP, partnering with us paves the way to a new horizon of opportunities for your dealership.
Diversifying your finance options doesn’t just provide a service—it empowers your customers. By offering a broader array of choices, you can meet the varying financial needs of your clientele, ensuring higher acceptance rates and driving sales even amidst the market’s current fluctuations.
Let’s explore this potential together, fostering a dealership environment that thrives on innovation, customer satisfaction, and, importantly, increased profitability. Don’t let this chance to reshape your dealership’s future slip away – contact us today!