Car Dealerships – Open for Business

With dealerships once again opening their doors, the future of buying and selling used cars looks set to change, certainly for the foreseeable future. With higher volumes of online selling and safer showroom exchanges, together with solo test drives, it’s a busy time for owners who need to put measures in place for a gradual return of customers to the forecourt.

With dealerships having been shut for a couple of months, getting your showroom up and running so it’s safe for customers and staff will be a challenge. In addition, changes in the way you operate may also mean a review of your current car dealership insurance to make sure you are covered.

Here we look at how you can improve your visibility in the market, the operational challenges you may be facing and what motor trade insurance changes you may need to implement.

Showroom Safety

With the latest calculations from the Society of Motor Manufacturers and Traders (SMMT) estimating that it costs £61 million a day to keep UK car showrooms shut ­­- through lost income and essential furlough funding - the organisation has put into place full guidance on getting your showroom up and running safely.

In addition, SMMT’s 10 reasons to #unlockauto campaign sets out why car showrooms, generally large open spaces, lend themselves well to social distancing. It outlines how their opening will support jobs, boost the economy, reduce burden on the government and meet the increasing customer demand as travel on public transport reduces, as well as allowing for accelerated fleet renewal and supporting UK manufacturing.

Taking it Online

Showrooms may have been closed since March, but buyers have not stopped browsing for new and second-hand cars, according to data and insights company Cazana. Through its Car and Classic website, it has found that interest is still there, but activity has shifted online, and dealer websites have become the focus. While lockdown has eased and showrooms reopen, there will still be a significant number of potential buyers who will prefer to research and buy online for some time yet.

For this reason, it has never been more important for dealerships to ensure their website is working well, is updated regularly with cars that are competitively priced, full details are available and there is an online chat format to help guide customers with advice. A simple and easy to use system for reserving and purchasing will also help to give your company the edge over competitors.

Together with web presence and the virtual shop window, investing in online advertising or using remarketing tactics to connect with visitors who have already visited your website, can help to put your company in front of a defined audience. Regularly updating your site with new information, pricing and products can also help to put you on the first page of Google’s search engine, making sure someone will find you when they are researching online.

Operational Challenges

Both the SMMT and the National Franchised Dealers Association (NFDA) have published guidance on the complete customer experience, from booking appointments to showroom social distancing, test drives, click & collect and aftersales, together with details on staff training, signage, sanitation and personal protective equipment (PPE).

Most dealerships have already put social distancing into place and screening measures. Possibly trickier is the sanitation of cars. Dealers will need to make sure that every car that is touched in any way can be completely sanitised before it is either test-driven or handed over to the new owner.

There are at least 40 different areas within a car that will need to be cleaned before someone gets inside (see our blog on the Top 10 Car Cleaning Products to Spruce Up Your Business). There is also the question of how long a car should be left standing after its valet to ensure safety – possibly 72 hours, maybe longer. Either way, it will be difficult given that multiple people will probably be touching many surfaces around all aspects of the car and full health and safety procedures will need to be in place.

Test Drives and Your Car Dealership Insurance

The DVLA recently confirmed that potential car buyers will be allowed to undertake solo test drives to ensure social distancing. For this to happen, the dealer must use registered trade plates and have full car dealership insurance in place. Most motor trade insurance policies do not offer unaccompanied test drive insurance as standard, so it is important to check with your broker before allowing anyone to take a sole test drive in your vehicles. It will probably mean adding an extension to your car dealership insurance policy.

The good news is that even while showrooms have been shut, the retail pricing has remained stable and is unlikely to see significant price reductions. Cazana Weekly Pricing Index has even reported that in some cases prices have even increased so car dealers can look forward to a brighter future on the forecourts.

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