Navigating Shifts In the Used Car Market
The used car market is constantly in flux, and it can be difficult for dealers to keep up with the latest trends. This article will discuss some of the significant changes in the used car market that have taken place and how dealers can adapt. We’ll also provide tips on staying ahead of the competition and maintaining a substantial market share.
Car buyers are becoming more educated and empowered
With the rise of the internet, car buyers have access to a wealth of information they can use to make informed buying decisions. Car websites now include vehicle history reports, safety ratings, and customer reviews. This has made it easier for buyers to find the right car for their needs and has given them more negotiating power.
Many online tools allow buyers to compare prices, get financing, and even trade in their old vehicles. These factors have increased the used car market’s transparency and made it more difficult for dealers to make a profit.
How can dealerships react?
To stay competitive, dealerships must offer fair prices, superior customer service, and a wide selection of vehicles. While fair prices may lower short-term profits, they’ll also increase customer trust and loyalty, which is essential for long-term success. Tools like Kelley Blue Book Price Advisor can help dealerships stay up-to-date on pricing trends.
Dealers also need to be willing to negotiate on price and offer financing options. Additionally, dealerships should keep up with the latest technology to provide their customers with the best possible experience.
Customer service is more important than ever
With many tech companies from every industry offering excellent customer service, car dealerships must step up their game. Attracting and retaining customers requires them to offer a superior level of service. This includes providing accurate information, being available when customers need them and following up after the sale.
Today’s buyers are spoiled for choice and have high expectations. They have also been exposed to 24/7 customer service and 1-day shipping from companies like Amazon. So, they expect the same level of service from car dealerships.
How can dealerships improve their customer service?
The best way to treat customers like VIPs is by providing them with concierge-level service. This means going above and beyond to meet their needs and exceed expectations. Thankfully there are many ways to do this, and we’ve listed a few below.
Offer a VIP experience: This can be as simple as offering a complimentary car wash or oil change with every purchase.
Make yourself available: Customers should be able to get in touch with you whenever they need to. This means having someone available to answer their questions 24/7, by phone, email, or live chat.
Offer trade-ins: Many customers will be looking to trade in their old car when they buy a new one. You will likely lose their business if you don’t offer this service. Tools like Kelley Blue Book Trade-In Advisor can help you give customers an accurate estimate of their trade-in value.
Follow up after the sale: Once the deal is done, don’t forget about your customer! Send them a follow-up email or give them a call to thank them for their business and see how they’re enjoying their new vehicle. Asking for feedback is also a great way to show that you care about your customers and their experience.
There’s a shift in consumer preferences
One of the most significant changes in the used car market is a shift in consumer preferences. More and more people are now interested in buying fuel-efficient, environmentally friendly, technologically advanced cars. This is especially true for younger buyers looking for vehicles that meet their needs and lifestyle.
As a result, many automakers are now offering hybrid and electric vehicles and cars with the latest safety features and infotainment systems. This is good news for dealerships because it can offer their customers a more comprehensive selection of vehicles.
How can dealers react?
The best way for dealers to respond to these changes in the used car market is by acquiring the proper inventory. This involves having a mix of both old and new vehicles and various makes and models. Stocking your lot with various electric, hybrid and fuel-efficient vehicles is a great way to appeal to today’s buyers.
Additionally, it’s essential to educate your sales staff on the features of these newer vehicles. They should be able to answer potential buyers’ questions and provide them with a test drive. For example, suppose a buyer is hesitant about getting an electric vehicle because they don’t know where to charge it. In that case, your sales staff should be able to educate them on the city charging infrastructure.
The rise of the sharing economy is having an impact on the used car market
Services like Uber and Airbnb have made it easier for people to get around without owning a car. This leads some people to reconsider whether they need to own a car.
However, this doesn’t mean that the used car market will disappear. Many still prefer to own their car, and reliable transportation will always be needed. The key for dealerships is to find these buyers and convince them that buying a used car is the best option for their needs.
How can dealers react?
There are a few ways dealers can react to the rise of the sharing economy.
One way to do this is by highlighting the benefits of owning a used car. For example, used car owners can use Turo to rent out their vehicles when they’re not using them, which can help offset the cost of ownership.
Another way to address this is by offering deals and incentives that make buying a used car more attractive. This could include low monthly payments, extended warranties, or free maintenance.
There’s a shift in where people are buying cars
In the past, most car buyers purchased their vehicles from dealerships. However, with the rise of the internet, more people are now buying cars online. This is true for younger buyers who are comfortable making large purchases without physically seeing the product.
These changes in the used car market have made it more critical for dealerships to have an online presence. In addition to having a website, dealerships should be active on social media and other online platforms. They can reach potential buyers who might not otherwise visit their dealership.
How can dealers react?
The best way for dealers to respond to these changes in the used car market is by investing in digital marketing. This includes creating targeted ads, optimizing your website for search engines, and using social media to connect with potential buyers. It’s also essential to ensure your sales staff is trained on how to close deals that start online. Completing an online deal often requires a different approach than closing a deal in person. For example, sales staff may need to know conversion tactics to turn website visitors into leads, follow up with leads who haven’t converted, and write compelling email copy.
How Kelley Blue Book can help
Kelley Blue Book can help dealerships navigate these changes in the used car market by providing them with the latest data and insights. Our suite of tools and services enables dealerships to reach more buyers and close more deals.
Some of the top tools to respond to these shifts that we offer are:
Kelley Blue Book Instant Cash Offer: This tool allows dealerships to provide instant offers to potential buyers. It’s a great way to attract buyers to your dealership.
Kelley Blue Book Price Advisor: This tool leverages Kelley Blue Books’ massive data set to help dealerships price their vehicles competitively. This is important because buyers are now more informed than ever before and won’t hesitate to walk away from a bad deal.
Kelley Blue Book Display Ads: These ads help dealerships reach potential buyers searching for vehicles like theirs.
Final thoughts on changes in the used car market
There are many changes in the used car market each year, with new technologies and models hitting the scene and disrupting the status quo. Car dealers must be prepared for these changes and know how to navigate them. In this article, we’ve outlined some of the most critical changes in the used car market happening right now. With the right tools and strategies, your dealership can stay ahead of the curve and keep your used car inventory moving.