Dealers highlight trend against agency model

By 2 Min Read

Almost three-quarters of dealers (72%) believe there is a trend developing against manufacturer agency models, according to new research by Startline Motor Finance.

For Startline’s Used Car Tracker, 302 consumers and 64 dealers were questioned. The survey revealed that 36% think more manufacturers will change their minds and drop agency, 23% think the agency model is wrong for dealers and 21% suggest it is proving wrong for manufacturers.

Paul Burgess, CEO at Startline Motor Finance, said: “The adoption of the agency model has always been controversial to a degree, and the recent decision of some manufacturers to reverse or delay their plans has caused a lot of noise.

“Our findings show that dealers believe that the tide may be turning, at least to an extent. Certainly, it appears to be a fairly commonly held view that agency isn’t working for dealers and manufacturers, and that some will change their mind about its adoption.”

The survey also found that 20% of dealers believe the sector is moving towards a hybrid model, with some manufacturers using agency and some staying with traditional franchise arrangements.

Burgess added: “This seems to us to be the most likely outcome for the future. There is almost certainly room for both agency and franchise models in the car market, and each appear to have their own benefits and drawbacks. It is up to manufacturers and dealers which of these sets of compromises they might prefer.”

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