One of the best ways to increase auto sales in 2020, is to first take a look at what we’ve learned from 2019. Whether you’re an auto seller or maker, 2020 is shaping up to be a solid year to rev up revenue. This guide covers the latest stats and insider secrets to capitalize on the changing market and, ultimately, increase auto sales.
2020 Auto Forecast
According to NADA’s annual sales forecast, U.S. auto sales are expected to exceed $16.8 million in new vehicles for 2020. Even though this estimate is a slight drop from 2019, it is by no means slowing down the opportunity for dealerships nationwide.
Changes to Consumer Behavior
Another exciting change to help you increase auto sales is the amount of money consumers are willing to spend. J.D. Power’s latest data shows that the average amount consumers spent to purchase a new vehicle in 2019 hit a record-breaking $34,217. This number is roughly a $1,300 increase from previous years. Naturally, the rising cost of automobiles plays a role in this uptick. But surprisingly, research also shows that consumers are choosing to buy more expensive, upgraded models.
This shift in financial priority is likely due to the tech needs and demands of today’s society. Upgrades like digital navigation, blind spot detection, and automated driving capabilities, are quickly becoming less of an option and more of a necessity for new buyers.
How Credit Impacts Close Rates
Granted, more money is great for business. However, higher prices also create the need for additional loan dollars. Currently, over 108 million Americans have a least 1 auto loan. Notably, for the 66% of Americans with a credit score in the ‘good’ to ‘exceptional’ range, loan approval typically isn’t an issue. In contrast, this leaves roughly 34% of consumers in the ‘fair’ to ‘very poor’ score brackets. Applicants in this score range will likely experience hurdles during the approval process.
Increase Auto Sales by Tapping Into Credit Declines
A point often overlooked is the current 20% decline rate based solely on poor credit. This large number of turn-downs forces many applicants to walk off the lot. For 2020, there’s a better option. Software solutions, like those found in ScoreShuttle, allow dealerships to increase auto sales by offering declines access to the digital toolkit. Not only can ScoreShuttle help both parties achieve their goals, the software also issues an alert once the customer reaches the score needed to make a purchase. By offering credit-boosting products like ScoreShuttle, dealerships can tap into this under-served market and ultimately increase auto sales.
Other Auto Trends to Increase Auto Sales
Outside of upgrades and software solutions, another way to increase auto sales is to consider the evolution of what matters to consumers. Superior products and prices will always be a priority to prospective buyers. However, according to Forbes, so is the overall buying experience. With this in mind, consumers are looking to purchase from dealerships they connect with on an emotional level. In addition to a desire for thoughtfulness from a customer service standpoint, consumers are also more likely to buy from those who create a culture that also cares about their employees and social causes.
From innovate tech to a growing need for a better buying experience, 2020 has plenty of room to increase auto sales and rev up revenue throughout the industry.
Resources: [https://www.nada.org/NADA-2020-Economic-Forecast/] [https://lmc-auto.com/wp-content/uploads/2019/10/LMCA-and-JD-Power-Forecast-OCT-2019.pdf] [https://www.forbes.com/sites/niallmccarthy/2019/01/03/the-number-of-americans-holding-auto-loan-debt-shows-no-signs-of-slowing-down-infographic/#211889157ffe] [https://www.newyorkfed.org/newsevents/news/research/2018/an181203][https://www.forbes.com/sites/blakemorgan/2019/12/17/5-predictions-for-customer-experience-in-2020/#2bea7ffb2ec7]