Vehicle retailers can use technology to reduce the duration of courtesy car loans by 25% on average according to new analysis by the accident aftercare and vehicle management technology provider, AX.
- New analysis by AX reveals reduction in courtesy car loan length
- Drivers return vehicles more quickly when loan car management system and telematics combined for improved utilisation
- Reduction in loan duration of 25% means typical dealer courtesy fleet could be trimmed in size or used to boost revenue
- Combination of services also minimises risk to motor trade insurance policy
The research revealed that drivers given courtesy loan cars typically returned vehicles half a day sooner* when telematics was installed alongside the use of AX’s real-time loan car management system.
The trend was seen across large dealer groups and individual retailers, and in every case resulted in improved utilisation of vehicle fleets, allowing dealerships to either increase the maximum number of courtesy loans – to increase revenue – or reduce the number of courtesy cars on their books to minimise costs.
AX’s analysis comes as dealer revenues come under pressure, with UK new car registrations falling 7.3% in January 2020 after a drop of 2.4% overall in 2019.
Improving utilisation for courtesy car loan fleets will improve the bottom line by boosting the number of potential loans – which generate a profit via day-rate insurance – or will enable dealers and groups alike to rethink the size of their fleets.
This new study reveals some genuinely intriguing and helpful insight which should help dealers evaluate their courtesy car strategy. Combining telematics with day-to-day vehicle management tools clearly impacts loan periods, and the effect is quite powerful.
Vince Powell, Managing Director of AX Innovation
“When customers know there’s telematics on board, they tend to return cars half a day sooner. It seems that the subtle psychological shift means they only keep a car for as long is it’s required.
“Ultimately it is good for them because of the added safety and security, but also an opportunity for dealers to reconsider vehicle deployment.
“While telematics reduces courtesy car loan duration, we suggest using it in the opposite way to support sales with extended test drives. The insight generated from a test drive helps the sales team ensure the customer is buying the right car for them, engendering trust and helping turn strong leads into sales.”
AX Connect services include a full range of in-vehicle connected devices and monitoring software. This not only allows users to know the location of every one of their vehicles, it helps manage driver behaviour or misuse, while removing disputes around fines and congestion charges and provides detailed management reporting. Connect can seamlessly combine with the AX Manage real-time loan car management system and insurance solutions.For more information about AX services, take a look at AX Innovation.