Stay Ahead of the Trends to Grow
While dealers have benefited from the past six years of growth, the positive trends that have kept vehicle-sales momentum going are puttering out.
The pent-up demand from 2010 and 2011 is virtually gone, and lenders are pulling back from subprime loans after a time when credit standards were broadened. Lenders also are concerned about extending credit terms too much more without impacting loss ratios.
Of course, dealers who’ve been in the business during the past 10 to 20 years understand the cyclical nature of our industry. They know that when challenging times arise, they must look at other streams of revenue to maintain profitability. Through the last recession, many
dealers grew their pre-owned sales, service and finance offerings. Now is the time to review those offerings and further tweak them.
For instance, used-vehicle prices are falling due to a surge of off-lease vehicles entering the market. In turn, this trend is helping foster greater demand for used vehicles. Now would be a good time to evaluate your floorplan to determine how to best utilize used-vehicle inventory with certified pre-owned programs.
There also are several positive changes on which dealers can capitalize – starting with consumer expectations. In addition to shifting buying patterns, consumers are changing their expectations of what the car-buying process should be. According to a 2015 Autotrader study:
- 56% of consumers want the ability to start the negotiation process online.
- 72% want to complete the credit application and financing paperwork online.
- 75% would consider conducting the entire car-buying process online.