JudgeService State of the Nation Summer 2023
The 4th annual JudgeService State of the Nation report is available now and once again provides data-based insight into the thoughts and motivations of the UK’s car-buying public.
This year’s report polled the views of 6,524 franchised dealer customers on a broad range of topics to provide retailers with a clearer understanding of what makes their customers tick.
By way of a sneak preview of what’s covered in the full report, here’s a taster of some of the key topics:
• What impact does the cost of living crisis have on how customers budget for their next purchase?
• Electric Vehicles – are customers ready to transition away from their trusty internal combustion engine (ICE) cars?
• How much has the rise in specialist online car-buying services reduced part-exchange transactions at dealerships?
The appetite among consumers to buy cars remains strong, despite the ongoing impact of rising inflation, high energy costs, and interest rate hikes. Our research found that nearly half (47%) will carry on with their purchases despite budgets being squeezed.
Other buyers say they will factor in rising living costs to make their next purchase more cost-effective.
One in ten said they would consider a cheaper make or model, 9% will switch from new to used and 7% will consider smaller cars but stay with their current brand, and 3% will look at older vehicles.
A further 7% will look at electric vehicles for potential fuel cost savings. However, for a quarter of buyers, the impact on their domestic budgets is proving too much, prompting them to run their current cars longer. Although just 5% say, they no longer intend to change their cars.
JudgeService’s view: “Our survey shows just how resilient British car buyers are, with most saying they will take the rising costs on the chin or mitigate the impact by compromising on what they would typically choose."
“For dealers, this means factoring in cost pressures and offering affordable finance options and payment walks for customers considering smaller or used cars."
As the clock counts down on banning new ICE car sales from 2030, our research found that the proportion of buyers considering purchasing an EV has dropped year-on-year.
In fact, EVs have experienced the biggest drop in fuel types among buyers currently planning their next purchase.
Twelve months ago, 15% of owners said they expected their next purchase to be an EV. However, this has now dropped to just 9%. While owners who plan to stay with EVs have also decreased year-on-year from 90% to 83%.
Hybrid buying intent also cooled, dropping from 17% to 15%, while plug-in hybrids increased from 5% to 7%.
However, owners intending to purchase a petrol model in their next buying cycle jumped from 32% to 48%, while diesel almost doubled from 9% to 17%.
The main barrier to EV adoption identified by the data is the upfront cost buyers face (68%), followed by insufficient charging points (58%), range anxiety (46%), and uncertainty over battery life (39%). At the same time, 20% admitted to just not wanting one.
JudgeService’s view: “The boom in new EV sales is being powered by the fleet sector on the back of improved supply and favourable benefit-in-kind allowances for company car drivers. However, EV adoption is in danger of losing some of this momentum if retail customers are not incentivised. Without tax incentives or subsidies, car buyers will purchase on price, even if that means staying with petrol or diesel for longer than many planned to.”
When it comes to trading-in time, most owners say they will use the franchised dealer they plan to buy their next car from to get a part-exchange valuation, but in practice, many end up selling to specialist buying platforms if they find a better price online.
Our data revealed a steep rise in the proportion of car purchasing transactions without part exchanges, increasing from 42% in May 2018 to 58% in March 2023.
When asked where they are most likely to get part-exchange valuations, nearly two-thirds (62%) of owners cited the dealer they are planning to buy from, with only 15% planning to use a specialist online car-buying platform.
However, when asked where they would look online for a part-exchange value, nearly half (46%) named WeBuyAnyCar, followed by Auto Trader (26%) and Motorway (14%). Dealer websites came fourth on the list, with just 13% of owners saying they would visit one for a valuation.
JudgeService’s view: “While it’s clear that most owners want to use the franchised dealer they’re buying from to take their part-exchange, in a single, convenient transaction, they are often, in reality, turning to online buyers instead to get better prices."
“This suggests many dealers risk scoring own goals by subconsciously undervaluing part-exchanges to boost margin. It’s time to realise the old motor trade practice of trying to ‘nick the PX’ has been negated by the emergence of digital disruptors with deep marketing pockets who have become household names, making them attractive alternatives to customers.”
Click here to view and download the full JudgeService 2023 State of the Nation: The Big Squeeze report.
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