Executive View: How used car dealers can manage rising complaint levels

James Hosking, managing director of AA Cars, discusses how best to deal with the increase in complaints about used cars.

With personal finances stretched more than ever, consumers are demanding more bang for their buck — and the used car market is no exception. Buyers aren't holding back on speaking up when they encounter a problem, and this has been helping fuel a rise in complaints about used cars.

The number of complaints made to dealerships by customers who have bought a second-hand vehicle increased in 2023 compared to the previous year, according to internal AA Cars data.

Second-hand vehicles are more prone to issues than new models, so it's unsurprising that the Motoring Ombudsman receives the most complaints about used car sales. But even when they can investigate, the Ombudsman finds that used car transactions are often tricky for consumers and businesses to navigate and find a resolution.

Complaints about used cars

As cars age, they inevitably run into problems. Unfortunately, some mechanical issues can’t always be foreseen - despite dealers doing the necessary checks. During 2023, 78% of the complaints handled by AA Cars’ mediation service related to a vehicle fault. Meanwhile, 6% of complaints were down to a lack of documents, 6% to poor customer service, 5% to deposits and 5% to cosmetic issues.

If drivers are hit with costly repairs not long after the point of sale they typically go back to the dealership as their first port of call. About 67% of motorists told an AA Cars survey they would always return to the same dealership within the first six months after purchase.

Why are complaints on the rise?

The cost-of-living crisis has much to answer for when it comes to increased complaints, and this trend isn’t confined to the motoring industry. When it comes to buying any goods or big-ticket items, consumers want to know they are getting value for every penny.

The Motoring Ombudsman reports a correlation between the cost-of-living crisis and complaints submitted to them, as well as seeing an increase in the costs being claimed.

This highlights the current strain on personal finances and how this is fuelling more people to take action if they feel they are not getting value for money.

The ombudsman also notes that there is often room for improvement in how businesses communicate important vehicle details to customers. Occasionally, dealerships may not provide a comprehensive overview of a used vehicle's history, mileage, service records, and any previous accidents or damage.

Providing this detailed information upfront allows customers to make well-informed decisions that align with their needs and budget. When all relevant details about a vehicle's history and condition are disclosed, buyers can proceed with confidence.

If any undisclosed issues come to light after a purchase, it can understandably lead to disappointment and strained customer relations.

Most dealerships strive for transparency, as cultivating trust benefits both the buyer and the business in the long run. An open flow of information creates positive experiences for all parties involved.

How do dealers react?

It's essential for dealerships to proactively address customer concerns with empathy and understanding. While challenges may arise, a proactive approach can help mitigate potential issues before they escalate.

Dealerships that do not have a formal complaint resolution process in place may adopt a reactive stance. But this can lead to delays in addressing grievances, potentially causing frustration for both parties.

At AA Cars, our impartial mediation service has efficiently resolved dealership complaints and can help businesses better prepare for future issues. One dealership, for instance, struggled with slow responses to grievances due to a lack of structure. But with our guidance they established a clear process for handling complaints. Although they were initially sceptical, they found our service beneficial, realising it aids dealerships as much as consumers to have a standard procedure in place.

What dealers need to do when they receive a complaint

Implementing a robust complaints procedure is essential for dealerships. It aids timely and effective resolution and also instils confidence in customers that their concerns won't be swept under the rug. It can also protect companies from damage to their reputation, as many people will take to social media when they encounter a problem.

More than two in five drivers (44%) say they feel more confident buying a car from a dealership that is transparent about its complaints procedures, according to AA Cars data.

However, if the reason a procedure has not been implemented is due to stretched resources and time constrictions, it can be beneficial for dealerships to seek outside help. An impartial mediation service provider can ensure swift resolution, saving valuable dealership time and satisfying complainants. AA Cars' data from 2023 shows that customers whose complaints were handled through our mediation service enjoyed a 98% satisfaction rate.

And that’s something worth shouting about.

James Hosking is managing director of AA Cars