Even though many consumers have been back in the market for a new or used car, there continues to be a lack of available discounts and deals for shoppers. The COVID-19 pandemic has undoubtedly hindered the auto industry due to the shortage of parts and various shutdowns throughout the past year and a half. This, in turn, has limited dealerships’ ability to offer discounts, and many may have seen a reduction in business because of it and need to find ways to get customers to come back.
Why are there no discounts?
Perhaps the most prominent reason for the lack of deals is the ongoing shortage of microchips and other parts that are needed for cars, especially brand-new models that have more sophisticated technologies in them. Coupled with very high demand for vehicles means the supply is not enough to keep up, especially when customers are picky with what they are wanting. This makes prices rise, but since manufacturers are lagging in the production of new vehicles, they cannot offer steep discounts like they sometimes do.
Who is offering discounts?
Last month, Gregg Fidan of RealCarTips noted that while discounts vary from region and even state-to-state, Audi was offering the highest discounts, with up to a $10,000 rebate on certain models. Certain Jeep, Ford, and Ram were offering rebates around $4,000, whereas Hyundai, Chevrolet, and Nissan are mostly only offering $500 or $1,000. Other manufacturers are scattered throughout the list, but ultimately average rebates are nowhere near where they were a couple of years ago, especially at year-end when many manufacturers normally offer really great deals.
|Related: As incentives drop and prices rise, how can dealers convert shoppers to buyers?
Solid Trade-In Deals
Since the demand is so high and inventory is so low, some dealerships are offering higher trade-in values for their customers’ existing cars. Such a trade gives the consumer a new car but also gains a car used inventory at the dealership. Ultimately, used cars are in higher demand than they were before, meaning trading in a car might save customers in the long run. Negotiating prices for new cars without a trade-in may be a tough task, but having a trade-in for leverage may get customers better deals.
Offering Other Incentives to Attract Customers
Since manufacturers are rather stingy on discounts right now, dealerships may be able to attract customers with other incentives. Even just offering a gift card to customers who come in and take a test drive might gain some business for a dealership. Of course, people may just come in to take a test drive so they can get a gift card, but if even just a few cars are sold as a result of it, the ultimate revenue may outweigh the cost.
As always, dealerships should also ensure they maintain a great reputation in the community. While this is not a new concept, customers may look harder at a dealership’s rapport in their local areas now that prices are high all around. Many well-known dealerships donate to local charities and/or volunteer for others, host parties and raffles, become drop-off locations for donations, invest in education programs, and provide emergency relief in their local areas when needed. There are many opportunities to get involved and dealerships that have better reputations may attract customers despite the lack of deals this year.
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