By Gerardo Montoya, Managing Director of Automotive at Experian UK&I
How can you start moving cars off your forecourt at a time when customer footfall has reduced to zero? That’s the challenge facing motor traders, as our industry weathers the Covid-19 pandemic and the safety measures which are paramount.
Customer demand has changed and will continue to be affected while the UK is under any social distancing measures, for however long they last.
Yet we still have a duty to get cars on the road for those who need them – the key workers who rely on their cars to get in and may need a replacement. Meanwhile, approximately 700,000 motor finance deals are due to expire in the next three months, and it’s fair to assume many of these customers will want replacements.
It’s also important to keep in mind that retailers of all kinds are looking at ways to keep their businesses active. For many, this means bringing people the best possible online experience so they can browse, enquire and purchase without leaving their homes.
There are motor traders who are established and comfortable online, but research has suggested that only five in 10 are. If your business is in the offline five, then now is the time to make the change to the affordable solutions which are already being used in the market.
Putting these processes in place now can position your business well for the future as more customers choose to buy online. We have already seen the decline in footfall on the high street as consumer trends move in this direction.
Here are five essential steps you need to consider for bringing your forecourt to laptops and smartphones, and cars to people’s homes:
Many traders will be in good shape already, perhaps because they are listing each car for sale on their own website and other popular online platforms. So, the challenge is differentiating your cars from the competition, displaying them in a way which inspires interest and builds confidence of prospective buyers.
Consider the strength of your photography and whether the vehicle is in position to catch the eye. How do your images measure up against comparable listings from your competitors? Make sure all the details are available for customers to compare vehicles – they may unfairly assume any missing information is being hidden for a reason. For used cars, you can also display a provenance check with the vehicle to show there’s no cause for buyers to beware.
Once a customer has decided on a vehicle, the journey they take to complete the purchase needs to be frictionless and easy for them to navigate without your guidance in the showroom. First, protect your business from the risk of fraud by checking electronic identity documents against government sources in real time.
Then make the most of technology to pre-populate application forms so people aren’t repeatedly typing the same information during their journey. With a customer’s consent, open banking allows you to prepopulate more than 80% of the financial details required. Open banking also offers trusted, bank account transaction data to help you make the right decision on whether a vehicle is affordable for the entirety of a loan.
People who are looking to part-exchange their vehicle to fund another purchase or as a deposit on a finance deal with have their budget influenced by the number you can offer them.
Providing a valuation without seeing the vehicle has been commonplace in our industry for some years, so carrying this out remotely isn’t the challenge. However, understanding the current value of a used car during this uncertain time is more difficult. Making use of real-time data to understand the market now and in the future can minimise your risk of offering an inaccurate trade-in price.
Many customers will be satisfied with viewing the materials provided online when making a purchase decision. For those who are not, make sure there is the opportunity to have a chat with your team over the phone. As people become accustomed to making video calls to see friends and family during the social distancing period, expect the need to join a FaceTime call with a prospective customer to provide added confidence.
A satisfied customer typically shakes your hand before driving away in their new vehicle, but clearly this is no longer appropriate. Make it known in advance to customers that their safety is important and social distancing rules will be observed when the vehicle is dropped off on their driveway.
Even though this is an unusual situation for us all, there are already examples of best practice to follow – with drivers delivering vehicles wearing surgical masks and gloves, before using anti-bacterial spray to clean the steering wheel and gear stick.
The challenge posed by the pandemic for both motor traders and car buyers cannot be overstated. Maximising the use of technology and taking steps to understand customers’ unique circumstances will put our industry in the best shape possible for the long term.