The majority of car owners (55%) still buy their car from a car showroom, increasing to 64% of over 55s, compared to just 38% of under 34s.
The survey of 2,000 UK drivers, commissioned by InsuretheGap.com, finds that over a third (36%) buy from showrooms (men 38% and women 34%) so they can part-exchange their vehicle, get a warranty (33%) and because they feel they have better consumer rights (27%).
However, one in five (21%) find negotiating in a car showroom stressful (men 18% and women 22%), and one in ten (10%) prefer to buy cars online or privately (18% of under 34s) with 14% saying they can get a better deal not buying from a car showroom (18% of under 34s).
The remaining buyers purchase cars from the website of a car manufacturer or car dealership (18%), a private seller (11%), car supermarkets in person (6%), online retailers e.g., Cazoo, Cinch (3%), online marketplace e.g., ebay, gumtree (3%) and ‘other’ including gifts from family members (4%).
One in twenty drivers (7%) are happy to buy a car online without seeing it, rising to 10% of under 55s, but only 5% of over 55s; and one in ten (11%) would also buy a car without a test drive (men 13% and women 10%).
Ben Wooltorton at InsuretheGap.com said: “Car showrooms continue to dominate the car industry but it’s clear that the long-term trend is moving away from them. Consumers are becoming used to new ways of buying cars, including online marketplaces, so the showrooms need to adapt to make it worth a driver’s while to purchase from them.”
The Financial Conduct Authority announced a new Consumer Duty on dealers to set higher and clearer standards to enhance consumer protection across financial services.
Commenting on the announcement Sue Robinson, Chief Executive of the National Franchised Dealers Association said, “We support a regulatory framework that will protect consumers and help them make informed decisions when taking on financial commitments including car finance and insurance”.
The new Consumer Duty will include requirements for firms to make it easier to switch or cancel financial products, to provide helpful and accessible customer support and to give clear information about the products being sold. Additionally, the Duty will focus on the diverse needs of their customers, including those in vulnerable circumstances.
Sue Robinson added, “We encourage clear and unambiguous customer information that can only improve the consumer’s experience and satisfaction with the products and services they are procuring. We also support initiatives that help consumers make better financial decisions particularly at a time when household budgets are stretched.”
The FCA is giving firms 12 months to implement the new rules and this is causing concern to dealers as Sue Robinson explained, “We are however concerned that the Duty will increase compliance costs to firms that could be passed on to customers.
“We are also concerned that the 12-month time frame for implementation is tight at a time when firms are facing major changes to the retail automotive sector and staff recruitment can be difficult”.
