By: Sheraaz Patel, Executive Head at Motorvaps

Demand for used vehicles is outpacing new car sales by more than two-to-one, driven by consumers looking for cost-effective options in a challenging economy. However, as inflation slows and interest rates drop, there may be a shift back towards new vehicle purchases, especially with further rate reductions anticipated in November. In this context, used car dealerships that offer long-term maintenance and protection services are well-positioned to adapt to these changes.

This is according to Sheraaz Patel, Executive Head at Motorvaps, who says that affordability has driven the shift towards used cars. “However, buyers want more than just a low price. They want assurance that their vehicles will remain reliable without the risk of unexpected repair costs.”

Providing Value in a Competitive Market

“In a competitive market for used vehicles, offering added value is essential to capturing consumer interest. This aligns with findings from the NIQ Mid-Year Consumer Outlook: Guide to 2025, which highlights that consumers tightening their belts are not solely focused on the lowest price – they’re looking for value too. Providing enough value can influence a buyer’s decision, encouraging them to spend a little more for the sake of convenience,” he points out.  

Sheraaz adds that customers increasingly seek ways to protect their investments and avoid unforeseen repair bills. “Dealerships that offer services such as extended warranties and service plans can meet this demand by providing buyers with protection against mechanical breakdowns and wear-and-tear expenses.”

“When dealerships take a holistic approach to the overall product experience and offer these kinds of solutions, they provide more than just a vehicle, they give customers peace of mind and a sense of security,” he notes. “This builds trust, strengthens customer loyalty, and sets dealerships apart in a competitive marketplace.”

Economic Challenges and Long-Term Customer Engagement

He explains that for dealerships, value-added products and services represent more than just a tool to enhance the customer experience – they can also help support ongoing customer engagement. “In a challenging economic environment where consumers are holding onto their vehicles for longer, maintaining strong relationships with customers through continued service offerings can provide a competitive advantage.”

“Dealerships that incorporate these services are better equipped to maintain customer engagement, deepen loyalty, and create additional revenue streams. As consumer preferences and economic conditions shift, the ability to provide long-term support for vehicle owners will be essential for sustaining profitability,” notes Sheraaz.

“Used car dealerships that prioritise delivering additional value to customers will be better positioned to meet future challenges,” he concludes.