Affordability Crisis in Auto – A Dealer Roadmap
Description
In this enlightening episode of "Facts Not Feelings," join host Brooke Furniss as she dives into the current automotive industry crisis with Paul Machin, Director of Strategic Accounts at Black Book. Explore the reasons behind the skyrocketing used car prices, inventory shortages, and how dealers can thrive in these challenging times. Discover Paul's insights on automotive pricing, dealer strategies, and future market predictions, offering valuable information for both industry professionals and consumers. Don't miss out on this in-depth analysis and strategies to navigate the automotive market crisis.
3 Main Takeaways
Used car prices have hit record highs due to limited inventory. Factors driving this include low new car production, overpayment on used cars previously, lower lease penetration, and lenders avoiding repossessions. This shortage will likely persist for years.
Dealerships need to align their inventory and pricing to what local incomes can actually afford. Most listings are for unaffordable price bands. Dealers should analyze pricing weekly and take write-downs to realign with true demand.
To acquire inventory, dealers should target trade-ins, buy directly from customers, check service ROs, and build relationships with local lenders and credit unions. Rigorous training of sales teams is key to having consultative conversations with buyers. Overall, being a "bring it to me" dealer will strengthen consumer relationships.
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YT Chapters
0:00 Introduction
1:40 Used Car Shortage Causes
5:58 Shortage Persistence Predictions
10:53 Maximize Trade-Ins
12:47 Buy Directly from Customers
14:33 Relationships with Local Lenders
15:10 Complimentary Safety Inspection
16:24 Retraining for Subprime Buyers
18:42 Bring It To Me vs Bite Me Dealers
20:09 Buyers Being Priced Out
22:15 $100k Income Now Needed
22:51 Paul’s article
24:45 Align Pricing with Local Demand
27:14 Frequent Price Evaluation
29:43 Biggest Price Jumps
37:38 Frictionless Sales and Service
38:52 Educate Buyers on Affordability
40:33 Service Complimentary Inspection
42:14 Key Crisis Drivers
44:58 Key Takeaways and Thanks
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