Over seven in ten new cars will be financed through personal contract purchase (PCP) deals in September market, says Auto Trader.
- 450,000 new cars set to leave showrooms in September ‘plate change month’, making it the 42nd month of growth in the new car market
- Retailers are being warned to take care with finance sales: the ombudsman highlights a rise in complaints about HP and PCP deals
Auto Trader, the UK’s largest digital marketplace for buying and selling new and used vehicles, has forecast the new car market for September. Continuing on 41 months of growth, experts predict a market of 450,000 units with more than 7 in 10 new financed on PCP deals.
Attractive PCP deals are seen as the engine of new car market growth, complemented by buoyant consumer confidence. Figures from the Finance & Leasing Association underline just how the market has grown in recent years, with used car sales beginning to follow the new car trend with progressively higher PCP penetration.
Proportion of private car sales funded through PCPs. Source: Finance & Leasing Association
|New car sales||64%||70%||73%|
|Used car sales||26%||33%|
However, retailers are being advised to tread carefully when selling PCP products in September, as figures from the Financial Ombudsman Service revealed an 18% rise in Hire Purchase complaints (including PCP deals) in 2014.
In total, 1,784 complaints were handled by the service and the majority of these related to the purchase of a vehicle. Of these, 37% were found in the consumer’s favour.
“It’s worth remembering that people are often more focused on the thrill of buying a new car and can lose sight of the small print,” warned Caroline Wells, head of outreach at the ombudsman. “When making a sale we’d urge all dealers to make sure customers know what they are signing up to and to keep records of what was discussed. That means that if problems crop up down the line, they can be sorted out easily.”
“Retailers are looking forward to a bumper September market and it’s important that we help them make the most of the opportunities, but also to navigate a path away from potential problems,” added Paul Harrison, head of motor finance at Auto Trader. “While the increase in finance complaints is perhaps unsurprising given the overall increase in car finance sales, it is encouraging to see that the ombudsman often rules in favour of the industry. We’ve worked with the ombudsman to create a check list of new and used car finance dos and don’ts to help retailers avoid consumer complaints and manage them if they do arise.
Often issues stem from a simple lack of clarity or communication at the point of sale. Tips from Auto Trader and the ombudsman include the following.
- If a consumer is buying under a finance agreement, take the time to thoroughly explain how the product works. A salesman may think that the number of monthly payments, the interest rate or the fact that a ‘balloon payment’ may be required at the end of the agreement are obvious. But taking the extra time to draw this to the consumer’s attention could avoid any disagreements further down the line
- Sometimes, consumers who have bought a car on finance may run into difficulty making the repayments. This would be something that they need to speak to the finance company about directly but, should a customer approach you, be helpful. If you’re able to find the right person or number at the finance company then some simple signposting can help the person reach a resolution much more quickly.
- A used car may have some wear and tear when it’s sold. But if a consumer contacts you to complain, taking the time to clearly explain the difference between fair wear and tear and mechanical defects improves transparency between the two parties. Often complaints happen because consumers and dealers are not clear with each other. Investigating any problems thoroughly and with the right evidence will go a long way to resolve it –simply relying on the fact that the car was “sold as seen” is unlikely to carry much weight, particularly if a complaint is reviewed by the ombudsman.
- If you have a vehicle provenance certificate or anything else to show the history and quality of the car, don’t wait for the customer to ask for it. Offer it to them. Customers may not always know about these, so offering this level of service could help reassure them. Some retailers are opening displaying provenance information alongside vehicles being advertised on their website which can only help build trust.
Notes to Editors:
Auto Trader Group plc is a 100% digital business having successfully completed the transition from a print title in 2013. Auto Trader sits at the heart of the UK’s vehicle buying process and operates the UK’s largest digital automotive marketplace.
Auto Trader’s primary activity is to help vehicle retailers compete effectively on the Marketplace in order to sell more vehicles, faster. The Marketplace brings together the largest and most engaged consumer audience. Autotrader.co.uk attracts around 44.5 million monthly cross-platform visits on its sites, with around 68% of visits coming through mobile devices, with the largest pool of vehicle sellers (listing more than 400,000 cars each day). In fact over 80% of all time spent on classified sites is spent on Auto Trader. The Group does not buy or sell any vehicles itself.
Auto Trader has around 92% prompted brand awareness in the UK, with 80% of UK retailer forecourts advertising via the website and around 65% of UK used car transactions involving cars listed on autotrader.co.uk.
Auto Trader’s market-leading position enables it to generate and collect large amounts of data on the UK’s automotive marketplace and leverage it to create a suite of services that allow retailers to:
- BUY – buy the right vehicles, at the right price
- MARKET – market their brands and businesses effectively in the digital world
- SELL- sell more vehicles through advertising on the UK’s largest digital automotive marketplace
- MANAGE – optimise their stock turn and vehicle margin.
For all trade media enquiries, please contact:
Nigel Wonnacott, PR Director at JJ Marketing, on 07802 483 971 or firstname.lastname@example.org