Dealers across the U.S. are doing their best to keep up as the new car market heads in unpredictable directions. But with both external and internal factors in constant flux, it can be difficult to track, much less understand, the trends affecting automotive retail.
On this episode of CBT Now, host Shyann Malone is joined by Edmunds’ executive director of industry insights Jessica Caldwell. Throughout her career in automotive retail, Caldwell has carefully analyzed the trends affecting the car market and provided critical insights to dealers when they needed it most. Furthermore, her 17-year tenure at Edmunds has given her a bird’s eye view of the industry that few other automotive experts share. Now Caldwell joins the show to discuss the current status of new vehicle sales and where she sees the business going in the coming months.
Key Takeaways
1. Dealers have started to acclimate to the changing car market and are even feeling a sense of normalcy return to the business.
2. New and used vehicle pricing remains strong for dealers, although the industry has seen brands cut costs on certain models. Nevertheless, the car market is still more profitable than it was before the pandemic and is unlikely to change anytime soon.
3. The average used vehicle APR has risen to an average of 11%, pushing customers to search for older models with more mileage than they may have preferred during the pre-pandemic car market.
4. Financing a vehicle is difficult across all sections of the car market, but especially in the used segment since buyers are unable to access OEM incentives and subsidies.
5. Despite the challenges, it is still possible to attract buyers in today’s market. To ease customer pain points, Caldwell encourages dealers to chip away at APRs and emphasize alternative ownership methods such as leasing.
"What we're seeing now is consumers are having to buy older vehicles [and] vehicles with more miles because budgets are set in a certain place and the vehicles are just not as inexpensive as a lot of consumers thought." — Jessica Caldwell
