It is less than two weeks before showrooms in England and Wales are set to reopen on April 12th, with Scottish retailers opening ‘click & collect’ services from April 5th onwards. To help retailers prepare, we have compiled some of the key findings from our recent industry studies, made up of responses from 5518 in-market buyers over the first three weeks of March.
In our latest research of 2758 in-market buyers, we found that nearly a quarter are set to buy in the next four weeks (22.2%), while 19.2% are looking to purchase a vehicle in the next 1-3 months’ time. This suggests that demand is once again on the rise.
Among those looking to buy within the next three months, 72.4% have already started searching for deals on their next car, and 32.7% have contacted a retailer about a vehicle. Ensuring that current stock is already advertised and that buyer leads are being answered is crucial; our research shows that the first wave of buyers is already deep into the research and comparison phase of their journey.
Showrooms reopening is crucial for the vast majority of buyers, who want to test drive their car before signing on the dotted line.
The proportion of buyers who wouldn’t buy without a test drive also varied significantly according to the type of car they were considering: in early March, our research of 1029 in-market buyers found that 59.7% of EV buyers were not willing to buy an electric car without test driving one; that’s understandable given that the vast majority of these customers will be buying their first EV. In contrast, only 46.0% of petrol and diesel buyers regard a test drive as essential.
When asked to explain the reasons that they felt a test drive was important, 81% of respondents wanted to make sure they liked driving the car, while 51% wanted to make sure the car was practical for their needs and 31% needed to understand how the car works.
Having suitable demonstration vehicles must be a priority, as will be having trained staff on site to help answer questions that concern the latest models, especially in relation to electric vehicles.
Budgets & additional policies
In March, we also surveyed how buyers’ budgets have changed. Four out of five buyers (78.7%) told us that Covid-19 has not had an impact on how much they are looking to spend on their next car; 15.2% are set to spend less than before, while 6.1% are looking to spend more.
The majority of new car buyers are still likely to opt for finance to support their purchase, while used buyers strongly prefer cash deals for their next car.
We also asked whether Covid-19 has had an impact on how people budget their spending; 18% stated that the pandemic has made it more important for them to be able to spread the costs of ownership across several months. The study found that buyers are now more likely to purchase additional policies – such as service plans and extended warranties – with their next car, to help them spread costs and to provide some financial certainty.
According to our research, 29.1% of buyers are now more likely to buy a service plan, and 19.3% are more likely to buy an extended warranty than they were before the pandemic. Even policies for wheel and tyre insurance and GAP protection saw a rise, with 4.5% now more likely to purchase wheel and tyre cover and 9.4% looking to protect the value of their purchase with GAP insurance.
The benefits provided by additional policies should be spelled out clearly to buyers throughout the purchase process – our research shows that many consumers will be more receptive to them.