Posted by Tom Lombardo on Wed, May 07, 2014 @ 11:00 AM
Car dealers worried about 2014 sales can relax – disappointing winter numbers were caused by record snow and cold, as it turns out, and not by the market. The market posted a robust 8% year-over-year sales increase for April, putting the industry back on track to sell at least 16 million new vehicles this year.
Even better: February and April produced the highest two-month sales volume -- 2.93 million units – since May and June 2007. That might mean that the Great Recession is finally fading into the history books where it belongs.
This May and June already look good. Dave Winslow, Chief Digital Strategist for the web-based software Dealer.com, told AutoNews that visits to dealer sites have increased 13% over last year. More significantly, visitors asking dealers to contact them by filling out “lead forms” increased a stellar 19%.
Demand might be accelerating because today Americans are driving the oldest fleet of cars ever seen on our highways. With an average age of 11.4 years, it’s likely that many Americans waited out the recession with their old car, and now that they feel more confident they’re ready to buy a new one.
You may want to prepare for an excellent summer and fall – not only to sell more new cars, but also to move all the used cars you’ll be acquiring as trade-ins.
Analysts expect that buyers who aren’t ready to buy a new car, along with ones entering the market for the first time, will drive up demand for used cars this year as well. In fact, analysts expect that used car sales might also hit pre-crisis levels, perhaps posting their highest numbers since 2005.
Three major trends drive this business. On the new car side, sport utility vehicles sell better than any other type, despite the fact that gasoline has crept back up towards $4.00 a gallon. On the used car side, buyers flock to “certified pre-owned” vehicles, preferring to buy cars they know the dealer has thoroughly checked and warranted.
But perhaps the most important trend involves interest rates, which are expected to stay at reasonable levels, enabling more people to acquire the cars they want. For used vehicles, the average buyer needs to plan on 7-8%, while sub-prime buyers can expect to pay between 12-19%, and certified pre-owned buyers will pay 4-5%. Depending on your credit score, new car loan interest rates can be as low as 0%!
From the buyer’s point of view, regardless of the interest rate, the larger the down payment, the better. And here’s where you can differentiate yourself from the competition: make it possible for your buyer to pay the largest down payment possible today. With a multiple check service in place, your customer can write 2-4 checks, guaranteed by us, to be deposited by you over a 30 day period. You get the sale now by helping your customer “save up” for their down payment by writing checks that match their future cash flow. And your customer gets to drive a car off your lot on the same day.
A multiple check service can help you close more sales over the course of what could be the best year we’ve seen in a while! Learn more here.