What's stopping dealerships offering extended test drives?

The test drive is the single best sales tool in a car dealership’s arsenal, but offering extended or unaccompanied rides is fraught with risk. Will things ever change?

New car registrations in the UK have now been in decline for some time. According to the latest data from SMMT, sales dropped 3.4% in the first half of 2019 compared to the six months to June 2018 - a trend that continues 2018’s own year-on-year decline of 6.8%.

For car dealers and dealer groups, this means growing competition on the forecourt. As the size of the new car market shrinks, dealerships are having to fight harder and harder for motorists’ business.

For all this, though, most are still reluctant to use the one sales tool they know to be most effective at closing a sale: the extended test drive.

It’s obvious that a driver should want to spend a meaningful period of time with a car before making what could be one of their biggest ever financial decisions. One dealer group told us that 60% of their customers who take an extended test drive go on to make a purchase - and 20% of those purchase a different car to the one they tested first!

So, what’s stopping dealerships offering extended test drives? And will this ever change?

The risks of extended test drives

The problem of extending test drives from their current average of 15 minutes to between 24 and 48 hours is that, for most dealerships, the risks are considered to outweigh the benefits.

Examples include, at one end of the scale, minor cosmetic damage and wear and tear to the vehicle. Many drivers will, in good faith, wish to get a feel for a car’s limitations as well as its strengths. In more extreme cases, a car could be vandalised, involved in an accident or even stolen.

As a result, the insurance premiums for a dealership that offers extended test drives can be extremely costly - but there are ways they can reduce this.

Enabling extended test drives with vehicle tracking

Specifically, the use of vehicle tracking and fleet management solutions can help dealers reduce their insurance premiums with better end-to-end visibility of how their demonstrator vehicles are used in practice.

Moreover, the use of these technologies can also help optimise utilisation of the demonstrator fleet, reducing the overall cost of offering flexible test drive options for potential customers.

Find out more about choosing the right telematics supplier for your business in our free guide.

Of course, not all vehicle tracking solutions are created equal - so it’s important for dealerships to choose the right specifications for their requirements. Where theft is a concern, for example, it’s wise to choose covert devices as OEM units may be easily removed by thieves.

For many dealers, real-time reporting functionality will also be valuable as a way to ensure cars are protected at all times, and any unexpected behaviour from the driver is flagged and accounted for. Making the customer aware is often enough to prevent any poor driver behaviour.

More generally, the more data you collect and analyse on how your demonstrator fleet is used, the better - all of this information can be used to develop a better buying experience for your customers in the future.

Building better customer relationships

There’s no question there’s an investment involved in offering extended test drives. However, it promises significant returns - and not just in terms of higher close rates.

As new car registrations decline, the other growing competitive battleground in the dealership world is aftersales customer care. And, if you can make the right impression at the start of your relationship with a customer, you have a much better opportunity of capturing upsell and service revenue from them later down the line.

In a recent survey of 200 motorists, almost half (49%) said they’d feel better about a dealer if they were given extended or unaccompanied test drives.

It’s a clear argument against taking the path of least resistance. The ability to offer extended test drives delivers a huge competitive advantage, allowing you to better optimise revenue, nurture customer relationships, and more.

Thanks to our fleet management solutions, covert devices and day insurance, AX is perfectly placed to help dealerships transform their test drives. To find out more, book a demo of AX manage today.