Car insurance companies question new car selling methods

As supermarket chain Tesco has taken steps to enter into used car sales over the Internet, several car insurance companies have begun to question if this will become standard operating procedure for the way drivers in the UK will buy their used cars in the future.

The general retailer and supermarket giant has stated it will be providing low price points on its used car stock through careful cost control measures.  As the likelihood of the appeal of such a practice will be high due to the current economic landscape, one provider of discount car insurance conducted a survey to determine the possible success of such a sales method.

Swinton, one of the largest car insurance groups in the UK, conducted a survey of 2,200 customers online and discovered that 28 per cent of motorists would consider purchasing a car from a chain such as Tesco if the price offered was a competitive one.  Nearly one out of every five Swinton policy holders admitted to prefer this new car purchasing method  as 17 per cent considered it to be both time- and cost-efficient.

However the new Tesco service is lacking in that vehicles purchased would not be available for test drives.  Instead the supermarket chain will provide a video of the car in question being put through its paces.  The website will also have on display several detailed pictures of cars available for purchase as well as fuel usage details and history reports on each vehicle.  However being unable to physically test-drive or even see the car would result in 24 per cent of Swinton policy holders not choosing to purchase their next car from the Tesco site.

Swinton’s insurance development manager Steve Chelton stated that the insurer’s customers responded in a mixed fashion in regards to purchasing cars from an online general retailer.  Mr Chilton stated that this increased the difficulty in forcasting the concept’s success.

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