Automakers are finding some new and creative approaches to the sales process for anyone who wants to buy a new car. There are a couple of reasons why it has become necessary to rethink the purchasing process.
Before the coronavirus created significant economic disruptions, the average monthly payment for a car was over $550 for new vehicles and almost $400 for used ones. That’s more than what many families can afford.
That means automakers must maximize the value of this transaction.
What New Trends Are Shaping the Automotive Market?
- Online Car Sales
Cars are one of the few items that most people rarely purchase online. Ford looks to lead the way in the United States by creating an online ordering system for its first electric vehicle. More than half of the dealers in the UK expect to offer digital transactions within the next 24 months.
- AI and Automation
Artificial intelligence allows automakers and dealerships to suggest customized options for customers based on data they’ve shared. This process could encompass past purchasing decisions, driving habits, and employment needs to create the best combination of features and financing to create something more affordable.
This benefit could also streamline the negotiation process that is necessary when buying a car, which consumers rate as one of the biggest hassles of the transaction.
- New Lease Options
Some automakers are changing leases to give customers a non-negotiable price that includes maintenance and insurance. As long as you don’t exceed the mileage in the agreement, then there aren’t any surprise costs to vehicle ownership. This trend reflects a desire to reduce the complications of having a car while giving more households the option to take advantage of the latest features and technology offered by the industry.
- Balloon Loans
Some customers don’t mind making a car payment for 6-7 years to keep the monthly amount due affordable. Balloon loans make the costs lower over the life of the loan, but it requires a large payment at the end of the term. Lenders are creating a hybrid product that features aspects of a lease and a balloon loan so consumers can choose to walk away from the car once the due date arrives without negative credit consequences.
- Subscription Services
Several automakers provide consumers with maintenance, roadside assistance, and insurance in one optional package that comes with the vehicle. It creates an option outside of the traditional transaction that reduces the need for customers to juggle multiple accounts to enjoy ownership.
The price of a vehicle averages almost $40,000 today. Although there are base models that cost half of this amount, dealers are finding that customization is an option that creates revenues.