Used cars are dealers' weakness

Hamburg/Nuernberg. Used-car buyers feel like second-class customers and prefer buying vehicles from private individuals.

To regain market share, dealerships urgently need to improve their approach to customers and their product lines.

Those are the main results of a survey of 8,900 consumers considering used-car purchases.

The Puls market research in Nuernberg undertook the study for Hamburg-based Auto Business Services, an Aral subsidiary.

Authorized dealers are involved in only about a third of the 7 million ownership transfers each year, primarily handling used cars up to three years old.

Many customers drift away after that, turning mostly to private sellers, who account for one-half of the market.

The reform of Germany's law of obligations in 2002 has contributed to the authorized dealers' diminished interest in used-car sales. It established warranty requirements for used vehicles that dealers sell to consumers.

According to the study, many dealers reacted by dropping older vehicles from their inventories. But it was precisely these vehicles, costing an average of 8,000 euros, that were most in demand.

Authorized dealers offer used vehicles that cost an average of 12,000 euros, a third more than the price expectations for most customers. The result is that 52 percent of those surveyed would like to get more for their money at the brand dealers. Another 11 percent said they absolutely would not buy from a dealership.

To win back market share, dealers must do more than simply realign their product lines, according to the study. Dealer mindsets have to change as well.

About 38 percent of consumers who were dissatisfied with sales conversations at dealerships complained about unfriendly and arrogant staff.

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