The Consumer Rights Act 2015: Are you ready?

Posted by Kelvin Brookes in Guest Blogs, Motoring News | 0 comments

Sep 28, 15

The new Consumer Rights Act 2015 will replace the Sales of Goods Act on 1 October 2015.

New rights have been given to the consumer and it is important you understand them. Your customer now has the right to reject a vehicle within 30 days of purchase without you being given any opportunity to repair. After 30 days you have the right to repair however the customer can reject if the first repair is unsuccessful, or should another fault occur.

At Lawgistics we have been scrutinising the legislation and examining the guidance notes provided by the Government, to see how this Act affects you the trader and what steps you can take to protect your business against consumers using this law unfairly to reject vehicles. We are pleased to share with you our recommendations.

The biggest change is the 30 Day Rejection period. In order to reject a vehicle within 30 days it is necessary for the customer to prove that there is a fault now which renders the vehicle not of satisfactory quality, not fit for particular purpose or not as describes. The customer also has to prove the fault was present at the point of sale

To help counteract this contention you need to be able to provide evidence of the condition of the vehicle when sold. Lawgistics recommends that you provide current MOT, a PDI check list sheet endorsed by the customer after they have examined and test driven the vehicle and a video or photographic record as evidence of the condition of the vehicle at the point of sale

After 30 days you have the right to repair however the customer can reject the vehicle if the first repair is unsuccessful, or should another fault occur.

The Act allows for only one repair, unless otherwise agreed with the customer. With a used vehicle there will be varying degrees of wear and tear and as such it may have one or multiple failings. We feel the new Act puts the dealer at an unfair disadvantage.

Lawgistics recommends that every vehicle is sold with a warranty and that every repair is carried out under that warranty, with the customer’s agreement.

By offering the vehicle with a warranty and completing any repair under that warranty then the customers statutory rights are not being used and therefore the provisions of the Consumer Rights Act are not being relied on.

Whilst any warranty can be used, if you provide your own warranty you will have more flexibility to authorise repairs and make goodwill gestures. Multiple repairs can be made under the warranty providing you with the best option to increase the right to repair without invoking the right to reject.

Nona Bowkis is a legal advisor with motor legal firm Lawgistics

The source article can be found at http://www.motortrader.com/blogs/guest-blog/consumer-rights-act-2015-ready/

Perfect storm forecast for Q4. But it’s not too late to act

Posted by Kelvin Brookes in Guest Blogs, Motoring News | 0 comments

Sep 24, 15

Any plan to batten down the hatches at the end of Q3 could prove to be a nail in the coffin for many car retailers this year, unless they develop an alternative strategy and act fast.

The traditional approach of trying to hold onto as much of the profit generated during the first nine months of the year, to then weather the storm of Q4 losses through to the year-end, will not be a viable course of action for many.

The impact of higher sales volumes at the expense of greatly reduced retained margins is seriously effecting the smaller groups and single sites in particular.  It’s these retailers without sufficient scale to leverage the best deals from manufacturers that are most vulnerable, but even some of the larger groups are already reporting some pretty sick trading.

Having recently sought the opinions of 257 business leaders from our database of clients and contacts, it’s clear from responses received that UK retailers are in choppy waters right now.  Add to this the recent comments from Andre Konsbruck, director of Audi UK, that “the industry is being damaged by such high volume being pushed through the UK” and we know that we’re heading for trouble.

When you lay down the facts of a) too little chassis profit being generated at point of sale, b) the wrong profile of part-exchanges being brought into stock at too high a value, and c) credit lines already being stretched – even before the raft of self-registrations hit the books; it’s clear that motor retailers are heading for a perfect storm in Q4.

A different course of action is therefore required and it needs to centre on retailers ringing more profit from aftersales.  There’s a growing  one to three year old car parc that when stimulated by an effective CRM strategy, will generate plenty of opportunities to connect with the customer.  Demonstrate brand expertise and excellent value for money to customers when presenting work identified by effective use of VHC processes, and this will have an immediate impact on profitability. There’s an apathy to Aftersales, however, that that has led to pretty much every Aftersales yardstick reported by ASE remaining static year on year.

The apathy is fuelled in part by the growth of “internal” labour sales masking the real issue for so many businesses, that actual “retail” service work is going backwards!  Too many retailers have been overly reliant on new car sales and have paid scant regard to service and parts, the area of the business that for many brands delivers the majority of the total direct profit.  Let’s be clear also, that many manufacturers have been complicit by allowing their networks to amble on without having to present credible marketing and operational plans that demonstrate how they intend to maximise Aftersales.

In summary, for retailers to continue on the same course whilst waiting for the storm in new car sales to blow over is dangerous.  The reduction in car sales direct profit is impacting so hard for so many, that cash reserves and credit lines are likely to become exhausted very quickly.  It’s therefore time to set sail for “Plan B: Aftersales” – as only by growing retail labour sales in the workshop will many retailers find a safe passage to calmer waters.

Karl Davis is the CEO of Coachworks Consulting

The source article can be found at http://www.motortrader.com/blogs/guest-blog/perfect-storm-forecast-q4-late-act/

Social media, people power and keeping it real

Posted by Kelvin Brookes in Guest Blogs, Motoring News | 0 comments

Sep 14, 15

Consumers now choose and buy cars differently than in the past. They do most of their research online and in many cases have already decided on their car of choice before they visit a dealership.

This, combined with the decreasing effectiveness of traditional advertising, makes for quite a shift in marketing strategy for dealers. Consumer choice is now influenced hugely by what customers say to each other online about products and services.

People power is more powerful than traditional advertising methods and, I suspect, even sales staff. So spend time mapping your customer journey to understand where you can help consumers and enable them to have conversations with each other.

And develop a seamless interplay between traditional off-line advertising, the digital world and the showroom. Traditional offline advertising, such as billboards, TV, newspapers and magazines are undoubtedly still important to raise awareness but that activity needs to be weaved into your digital strategy.

In turn, this needs to be linked to your car dealership. The message and the experience must be seamless across all channels. Start to use the power of data from your digital and mobile applications to get to know your customers.

If a consumer has spent a lot of time researching their chosen car and has engaged with your brand on Twitter or Instagram, when they walk into your car dealership, you should already know them. After all, they have taken the time to decide they want to buy your car. Shouldn’t you then be in a position to reciprocate by knowing them?

As you develop new ways to integrate user-generated content and to enable your customers to talk to each other, the vital point to remember is to keep it real. Don’t be tempted to manipulate the voice of the customer as it will only backfire.

If you have the confidence to be authentic, you will be rewarded by increased sales and customer loyalty.

Richard Anson is founder and a non-executive director of Reevoo

The source article can be found at http://www.motortrader.com/blogs/guest-blog/social-media-people-power-keeping-real/

Shaking up the traditional dealership with new retail concepts

Posted by Kelvin Brookes in Guest Blogs, Motoring News | 0 comments

Sep 03, 15

The simplicity of online shopping has created a new generation of consumers who expect to be able to buy everything they need at the touch of a button. The automotive sector is no exception, and many manufacturers are embracing changing purchasing habits as an opportunity to engage customers and create new shopping experiences.

Tesla, for example, has pioneered its Gallery and Store concept in the US market. Instead of heading to a dealership to test drive cars, Tesla customers can visit dedicated smaller stores located in popular shopping districts to gain information about the products available, before being encouraged to make their purchases online.

Although the idea that motorists would be prepared to buy cars without a test drive may seem farfetched, it is becoming more common place. In fact, Gesellschaft für Konsumforschung’s Automotive Future Trends survey found that 31% of under 35-year-olds would be happy to purchase a new car online.

BMW has recognised the growing trend and is now focusing more on brand experience across Europe, launching city centre Brand Stores, which showcase a very select number of car models and use virtual and interactive technology to allow customers to explore the full range. The benefits of this approach are twofold: it allows brands to reach customers at new touchpoints, away from the out-of-town showroom; and it can be highly cost-effective, requiring just a small retail space, rather than a full showroom.

Audi has also shaken up the traditional dealership, utilising a variety of technologies to present products in its flagship store in Mayfair, London. Customers get access to millions of configurations to build their perfect Audi using interactive screens and can then order it online. In fact, 50 per cent of people who bought a car from Audi’s new store format were so happy with the digital experience they placed an order without test driving the vehicle first. With the brand reporting the average cost of a new car sold in Audi City London is £8,000 higher than the average for Audi’s UK dealership network, the proof of concept is clear.

While we’re seeing more companies embrace this new format, the successful ones will be those that still capture the essence of their brand in their retail stores. Ensuring the core brand values are implemented at every touchpoint is key to creating a consistent customer experience. This may require substantial investment in high end finishes and staff training, soft skills and the sharing of information, is more important that simply closing a sale, but the brands that get this new format right now will be the winners with customers in the years to come.

Paul Shilling is global board director of Principle

The source article can be found at http://www.motortrader.com/blogs/guest-blog/shaking-traditional-dealership-new-retail-concepts/

Countdown to the new FCA rules on GAP

Posted by Kelvin Brookes in Guest Blogs, Motoring News | 0 comments

Aug 26, 15

With the countdown clock ticking towards 1 September, the new ‘65’ plate will be uppermost in the minds of people in dealerships across the UK.

It is also the date when new processes for the sale of GAP insurance must come into force – this will affect all sales and this could well mean those new cars rolling off the forecourts from September 1st.

Our team at AutoProtect has been working to ensure every dealer we work with knows about the changes and what they must do to ensure compliance with this new FCA requirement.

On a wider basis, I’m pleased to have this opportunity to highlight the change and steps required, in a simple format, that I hope can be used in every dealer showroom.

From 1st September 2015, dealers can only sell GAP insurance following a four day deferral period starting when first offering the product and registering that the offer has been made to the customer.

Dealers must provide customers with prescribed information to help them shop around and be more engaged when making decisions about purchasing the product.

Dealers must also introduce a deferral period, which means GAP insurance cannot be introduced and sold on the same day.

The new rules apply to the sale of GAP policies to consumers and commercial customers when sold in connection with the sale of a vehicle or other goods and services, for example a credit agreement funding the purchase of a vehicle.

Ten Point Plan for Change

1. Ensure every sales person is aware of the changes to GAP sales and the Sept 1st change-over date.
2. Check your current GAP/RTI product is fully cancellable and transferable.
3. The changes to the sales process come into effect on 1 September so start to make the changes now – do not wait until change-over day. Remember you need to provide the prescribed information and evidence the four day deferral period for GAP insurance policies concluded after 1 September – these may be existing orders.
4. All sales documented from 1 September are affected, so you should really create a cut off now to operate on the new standard to ensure compliance.
5. Prepare and print a ‘Prescribed Information’ form unless, or until, you have a digital form available. Ensure every customer offered GAP is provided with the form and that you are able to evidence this within your sales process.
6. Develop a follow up process to ensure the customer is protected after the four day deferral period.
7. Ensure documented evidence is in place for every sale – and keep it safe as it may be needed in the future.
8. Keep a record of all GAP sales for future reporting, recording the number of customer initiated sales is a particular requirement.
9. Don’t adopt any practice that could be seen as an unfair contract – anything that looks like an ‘opt out’ box should be avoided.
10. Don’t stop offering GAP – the FCA’s review recognised that customers buying the product in the showroom were happy with the experience.

Mike Macaulay is Corporate Business Development Manager with AutoProtect.

The source article can be found at http://www.motortrader.com/blogs/guest-blog/countdown-new-fca-rules-gap/

Why it’s story time for millennial car buyers

Posted by Kelvin Brookes in Guest Blogs, Motoring News | 0 comments

Aug 24, 15

There’s been a lot of debate in the automotive industry about how millennials aren’t as interested in buying cars as their predecessors. Dealers are keen to seize the next generation of customers – but that means understanding how to make car ownership appeal to tech- and marketing-savvy twentysomethings.

The most obvious step is to look online – that’s where millennials do most of their pre-purchase research. Headstream recently commissioned a study of 2,000 UK adults regarding their internet habits, and it found that car manufacturers and dealerships looking to get younger customers involved and engaged and buying need to focus more on storytelling.

Why? Because when asked what type of online content they most want to see from automotive brands, “humorous, dramatic or heart-warming stories” ranked at the very top, even ahead of discounts, among the 18-24 and 25-34-year-olds millennial groups.

These key younger audiences want stories more than they want special offers, product reviews and ratings, hints and tips or news delivered via social media. There was also a fairly even split between customers who want to see content produced by other customers and those who want material made by the dealer or brand itself. And video, unsurprisingly, is the most desired channel for delivering that content.

What this all suggests is that dealers and car brands need to explore so-called ‘advocacy content’ – getting their customers themselves to tell the stories online of why and how they bought that particular car, why it’s worked so well for them and why they’d buy from that manufacturer again.

After all, millennials have been brought up on stories: retailers and tech brands that create whole narratives around their products that can be enjoyed and shared online. They’re also far more willing to create their own content, particularly on video, and car brands and dealerships need to start making the most of that inclination.

Tom Chapman is the director of Headstream, the content marketing agency

The source article can be found at http://www.motortrader.com/blogs/guest-blog/story-time-millennial-car-buyers/