Around half of car buyers prefer agency sales to traditional dealers

Around half of British drivers would prefer to make their purchase from a showroom using the agency model, according to new research by What Car?.

A survey of 1221 in-market buyers found that 55.4% would rather purchase their next car directly from a manufacturer at a fixed price than haggle with a traditional dealer.

The same proportion of respondents would favour a move to the agency model in the future.

Currently, Genesis, Mercedes-Benz, Polestar and Tesla use the agency model in the UK, with Mercedes having adopted it in January.

As previously reported by Autocar, Volvo is set to follow in the coming weeks, and it will be joined by Mini and Stellantis premium brands Alfa Romeo and DS from next year. Jaguar Land Rover also plans to adopt the model by 2025.

The What Car? survey also found that only 24.6% of buyers enjoy haggling over the price of a new car. The other 75.4% of respondents dislike it, accept it as part of the buying process or never do it.

Simplifying the buying process by guaranteeing a fixed price is often touted by manufacturers as a key benefit of moving to the agency model.

This also benefits the brand, because it can take full control of pricing and remove limit discounts to boost profits.

However, Renault Group CEO Luca de Meo has warned of the pitfalls of the model for mainstream brands. He told Automotive News Europe that “you need to have a very unique product not to offer discounts”.

He added that offering a basic cut of sales (5%) to dealers operating showrooms through the agency model risks them abandoning mainstream brands for those with wider margins.

New manufacturers have also been slow to scale up their sales presence under the agency model.

Genesis, for example, currently operates two showrooms in London, with a third set to open in Edinburgh this summer. The Korean premium brand is now searching for retail partners to open around 15 more sales centres in the UK next year.