The RAC’s dealer network group says dealers need to prepare now for harder times ahead if they are to keep up profit levels. With personal and business finances set to come under increased strain, and potentially the cost of stock continuing to rise, these issues need to be tackled, said Sean Kent, European director of automotive at Assurant, which partners with the RAC in the warranty and aftersales sector.
“We believe that continuing to achieve strong profits is certainly possible for dealers in the next 12 months,” he said. “However, there is almost certainly going to have to be a shift in dealer propositions. In a furtherance of the ongoing trend we have seen since the pandemic, stock shortages will continue and, as a result, consumers will be faced with paying more.
“This is going to be a tough ask. Buyers feel quite vulnerable in terms of their own financial situation and we believe that dealers who understand this mindset are the ones who will be most likely to perform best.”
Kent added that the RAC dealer network was already working with its members to look at ways in which propositions could be enhanced. “In our view, warranties are at the heart of resolving these issues and we would expect there to be a move towards longer and more comprehensive warranties both as standard with a vehicle purchase and as part of a potential upgrade path. A comprehensive warranty from a recognised brand means a lot to a potential buyer.