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Motor dealer accessory sales in 2013 compared to 1993

Thursday 21st February 2013 10:34:29

The sale of 'add on' accessories is part and parcel of the process of buying a car from a motor dealer these days. UK car buyers can often say that sales staff in motor dealers seem more intent on selling these addition items than they were in selling the car! This seems very odd, but perhaps could be explained if you compare the 'after sales' market in 2013 compared with 1993.

 

Motor dealer accessory sales in 1993

 

Twenty years ago there were a list of traditional add on purchases that could be made. Mudflaps, carpet mats and boot liners were all examples of the types of items that were often sold as part of the vehicle purchase. Also, one of the biggest selling products was an extended warranty product for cars, even new ones. You have to remember back in 1993 that many manufacturers only offered a 1 year warranty on a new car, so additional cover for 2,3 or even 4 years was very popular.

 

Of course motor dealers could make profit on these sorts of products, but not nearly as much as with the margin in the vehicle sale, or indeed the finance package associated with it. Back in 1993, most vehicles were purchased with a standard hire purchase agreement arranged by the motor dealer. This mean much less competition for your loan than you may see today, with the rise of low rate personal loan alternatives through the direct lenders and banks.

 

 Also motor dealers had less competition when it came to selling vehicles also, the internet was not a tool that could be used as it is today. Now when a new car is purchased, customers have 'target' prices from brokers and motoring publications, they know what they should be paying. Also more of the manufacturers make good cars these days, warranties are better and vehicles are just more reliable. The likes of Ford and Vauxhall's simply dominated the market, in 2013 the story is much more diverse. So motor dealers make less per car, and less on the finance so where can they make there profit margins up?

 

The rise in non physical accessory sales

Well of course the physical items like mudflaps, mats and even paint protection packages are all popular, and there is clearly a margin to be made on them. However, the fact that they are physical items means they have to be bought and held in stock by the dealer. Much better to have a 'virtual' product that does not require any stock outlay upfront. This makes the likes of Gap Insurance, Tyre Insurance and SMART Dent and Alloy cover all the more attractive. These types of items make an attractive proposition for motor dealers, good profit margins with no stock outlay. You can see why your salesman may be more intent on you having it than they ever have before!

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