Sales of New and Used vehicles reached a peak by mid 2018. Although 2018 fell short of the record breaking sales of 2016, 2018 held its ground and most forecasts were bumped up mid year.
New car sales trends for 2019
Expect New car sales to flatten in 2019, and will likely decline as the year progresses. Interest rates are a big factor, as 5 year loans have risen from around 4.18% in 2016 to around 4.83% in late 2018. Since the average financing for a new car was around $31,000, consumer payments for New cars increased quite a bit.
Another factor that will impact New car sales is that the Used car market is still strong and growing. Cars are lasting longer than ever, lengthening trade cycles.
Used car sale trends for 2019
While Americans seem to lose the incentive to buy new, used vehicles are expected to grow in popularity.
Jessica Caldwell, director of industry analysis at Edmunds, said that “Used vehicles will likely grow in popularity as ‘new-car substitutes’ if incentives continue to stagnate and interest rates creep up. A large quantity of near-new used vehicles are expected to come into the market that will undoubtedly offer a compelling value message that resonates with discerning new-car shoppers.”
Where will these used cars come from? There happens to be an influx of ‘almost new’ off lease cars on the market which is expected to supply the demand and drive down prices, so the market will be ready if you are.
How will new technologies affect the auto industry in 2019?
There is talk that ride sharing services such as Uber and Lyft are becoming more of a concern as they grow in popularity. Although both companies continue to expand across the USA and abroad, they are used in mostly densely populated urban areas, mostly affecting other industries such as scooter sales and bike-sharing.
In a Statistica Global Consumer Survey for 2018, it was reported by Business Insider that ‘shared mobility services’ have not yet reached the mainstream and do not seem to be a threat for 2019 or even in the near future.
In addition, dealers should also not worry about Vehicle Subscription services, where a consumer can choose from a number of different vehicles and pay a monthly rate instead of being locked into an long term contract.
So, while the way consumers buy cars continues to evolve, they still value owning a car and will continue to buy cars in 2019!
Online Research Is More Effective Than Ever
Internet research is not a new trend. The trend is people are becoming more effective in their research. Shoppers are spending less time than ever researching their car purchases thanks to quicker access to information and a greater understanding of vehicles.
What Does This Mean For Dealerships in 2019?
- With more opportunity with used car sales growth, it’s important that you improve your reconditioning process. Dealercue.com gives their best practices for reconditioning used cars here. Basically, the reconditioning process is an investment, and when done right, you’ll improve your profits and provide your store with the long-term benefit of having happy customers. Every day you own the vehicle counts. Watch each line item and try to find an automated software product that helps push cars through as fast as possible.
- Know your customer and match your product mix with what they want! Dale Pollak says it best here.
- Your customers are more knowledgeable and you can use that to your advantage. Gain trust by sharing in the process with your customer. A great way to build trust is to show the customer that your information matches their research.
Embracing the best technology available is key to being able to properly run your reconditioning process. There are other products that offer some important features, but not all of them together with one product. ReconTRAC doesn’t just track your process, it helps fix it. Call us today to speak with our reconditioning experts and get your dealership ready for a great used car sales year!
2018 was a good year for car dealerships, and 2019 can be just as good if you follow these tips!