Dealers can expect continued high demand for sub-£5K used cars well into the economic recovery, according to The Warranty Group. Despite the economy’s return to its pre-recessionary level, The Warranty Group said demand for low cost used cars will continue as a result of real world wages having fallen since the recession began. “There is perhaps an expectation that the burgeoning economic recovery should see people start to spend more money on cars right across the used sector. However, this is not happening and is unlikely to do so. The recession has left a lot of people feeling much worse off and that situation is unlikely to change for quite some time, “ said Ian Simpson, sales and marketing director. “Dealers specialising in the sub-£5K sector will continue to do well if they retail quality, low cost cars that are likely to provide value…

New car registrations rose 6.2% in June to 228,291 units. In the first half of the year registrations rose 10.6% to 1,287,265 units, the best half-year total since 2005, according to the SMMT. The market was driven by attractive finance and PCP deals as carmakers targeted the UK for sales to compensate for weak markets in Europe, which are recovering but from a very low base. The UK market is now on track for 2.4 million new car registrations in 2014, up more than 6% on last year. Mike Hawes, SMMT chief executive, said: “Improving economic conditions have helped propel the UK new car market to a strong first half-year performance, with registrations up 10.6% on the same period in 2013. “Key to attracting consumers is the ever-improving efficiency of new cars, an important factor that is highlighted by the 51.3% increase in alternatively-fuelled…

At A1 we offer a 3 Month Back to Base warranty on all vehicles sold with the option to extend for up to 36 Months.                                                                                                                                                                                                                                        Sales of extended warranties are continuing to perform strongly despite rising levels of consumer confidence, says The Warranty Group. The company says that rises in consumer confidence traditionally prompt falls in warranty sales as used car customers take on the risk of unexpected motoring costs. However, Ian Simpson, sales and marketing director, said there was no evidence of this is happening in the market. “While confidence about personal finances is increasing, it remains a long way below the level where used car buyers are willing to be cavalier about the possibility of unplanned car repair costs,” he said “There is also a general concern among used car customers about the level of complexity inherent in all modern cars and most feel more…

Profitability at the average UK motor dealership surged 21.5% to £96,000 in March 2014 compared to March 2013. The buoyant performance in the plate-change month was largely due to strong new car sales allied to Q1 bonuses. Dealer profitability specialist ASE said the rolling 12 month return on sales figure now stands at 1.55%, the highest national figure it has recorded. ASE chairman Mike Jones said that the used car performance had held up although there were signs of a “slight softening” in the April market. Overhead absorption in the rolling 12 months to March improved to 56.7% compared to 55.7% a year ago. “It is pleasing to see the growth in overhead absorption, which is now making gains on a monthly basis,” said Jones. “This is a result of increased retail hours sold within the service department, a trend which should increase,” he…

The Financial Conduct Authority (FCA) today took responsibility for regulating the £200bn consumer credit market. Car finance providers said, for dealers, the new regime will focus on clear customer communications, affordability assessments and more uniform commission for car finance sold through brokers and dealers. “The accompanying Consumer Credit sourcebook (CONC), which also comes into effect today, requires that lenders, brokers and dealers put treating customers fairly firmly centre stage and specifically cautions lenders against using differential commission schemes that are structured solely around volume and profitability incentives,” said Paragon Car Finance. Julian Rance, head of Paragon Car Finance, said:  “As a lender, it is important that we develop products that are easy to understand, retain visibility and control over the pricing of our products to the end customer and ensure robust checks are in place within our application systems to assess affordability.” Martin Parr,…