Executive View: Demand for vehicle inspections on the rise - is it an opportunity for dealers?

James Hosking, AA Cars, argues that by addressing concerns head-on, dealerships have the potential to not only increase sales but also build lasting relationships with customers based on trust and transparency.

When it comes to major life purchases, buying a car ranks second only to getting a home. 

Yet, while rigorous inspections are standard practice in the property world, the same level of scrutiny is absent from the used car market. However, an overwhelming 91% of UK drivers crave more reassurance about a vehicle's condition when considering a used car purchase, according to data from AA Cars. 

This desire for reassurance is further underscored by the fact that 89% of drivers surveyed agree that an independent vehicle inspection would provide peace of mind.

Buyers’ hesitancy is understandable. A car represents not just a significant financial investment but also a critical tool for daily life, work, and family responsibilities. The prospect of hidden issues emerging post-purchase is a genuine concern, with 81% of buyers worrying about unexpected repair costs.

But the need for more reassurance presents both a challenge and an opportunity for the automotive industry. By addressing these concerns head-on, dealerships have the potential to not only increase sales and also build lasting relationships with customers based on trust and transparency.

The benefits of independent inspections

Independent vehicle inspections offer advantages for both buyers and sellers. For potential buyers, the peace of mind that comes with a thorough examination by an unbiased professional is invaluable.

These inspections can uncover issues that might not be immediately apparent during a test drive or casual inspection, from minor problems that could develop into major headaches to serious safety concerns that require immediate attention.

An inspection report provides buyers with a powerful negotiating tool. Armed with detailed information about the vehicle's condition, buyers can make better-informed decisions and potentially negotiate a fairer price based on any necessary repairs or maintenance.

But for dealerships, offering independent inspections can be a game-changer in building trust with potential customers. In a market where scepticism is high, transparency is important. By voluntarily submitting their inventory to rigorous third-party scrutiny, dealerships demonstrate confidence in their product and a commitment to customer satisfaction that goes beyond sales pitches.

A unique sales opportunity

The demand for extra reassurance in the used car market represents a valuable opportunity for forward-thinking dealerships. By integrating independent inspections into their sales process, dealers can address buyer concerns proactively, potentially streamlining the decision-making process and increasing conversion rates.

A dealership that offers comprehensive inspection reports is likely to be viewed as more trustworthy and customer-centric than one that doesn't. This perception can lead to increased customer loyalty, positive word-of-mouth referrals, and a stronger reputation in an increasingly competitive market.

Furthermore, dealerships that embrace this practice may find themselves attracting a wider pool of potential buyers, including those who might have been hesitant to consider used cars due to concerns about reliability or hidden issues. By removing these barriers to purchase, dealerships can expand their customer base and potentially increase sales volume.

Dealership hesitancy

Despite the clear benefits, some dealerships may be hesitant to adopt independent inspections as standard practice. Concerns about potential negative findings or the cost of implementing such a program are understandable but shortsighted.

Transparency builds trust, even when it reveals imperfections. A dealership that is open about minor issues and willing to address them demonstrates integrity and a commitment to customer satisfaction. This approach can turn potential negatives into positives, showcasing the dealership's honesty and dedication to quality.

The cost of introducing independent vehicle inspections - such as the service offered by AA Cars - should be viewed as an investment rather than an expense. While it may be an upfront cost initially, dealers could, in some cases, make overall savings when working with their warranty and finance providers due to the known or increased quality of the vehicles being sold.

The potential returns in terms of increased sales, customer loyalty, and positive reputation far outweigh the initial cost. Dealerships might even consider offering inspections as a premium service, potentially creating a new revenue stream while addressing customer needs.

The road forward

As the motoring industry continues to evolve, adapting to changing consumer expectations is crucial for success. The clear demand for greater reassurance in used car purchases presents an opportunity for innovation and differentiation in a crowded market.

Implementing independent vehicle inspections as a standard practice could revolutionise the used car buying experience, aligning it more closely with the processes applied to property transactions.

This shift would not only address the concerns of the vast majority of potential buyers but also elevate the overall standards of the industry.

For dealerships, embracing this change means positioning themselves at the forefront of a more transparent, customer-centric approach to used car sales. Those who lead this charge stand to gain significant advantages in terms of customer trust, loyalty, and ultimately, market share.

The data is clear: buyers want more reassurance when purchasing used cars. The question now is which dealerships will step up to meet this demand. Currently, it is estimated that of the 6.9 million used cars sold each year in the UK, fewer than 1% of buyers will have used an inspection service.

This staggeringly low figure represents a massive untapped market for dealerships willing to offer this service.

Moreover, when it comes to choosing a provider for vehicle inspections, the AA stands out as the clear frontrunner. Our research reveals that when survey respondents — who had not previously had a vehicle inspection done — were asked which UK company they would consider to carry out a vehicle inspection, an overwhelming 78% picked AA Vehicle Inspection as their first choice. 

This strong brand recognition and trust could be leveraged by dealerships partnering with the AA for inspection services, potentially increasing customer confidence and sales.

James Hosking is managing director of AA Cars