Independent dealers typically have a price advantage that is attractive to consumers, especially now as inflation remains high. Cole Frankman, Dealer Principal of Frankman Motor Company, joins us on today’s episode of Inside Automotive to share his perspective on what he’s seeing in his market.
Key Takeaways
1. As the market grapples with high inflation, affordability has become a significant concern for car buyers. Cole Frankman, in his role as Dealer Principal, has observed a growing price sensitivity among consumers, a trend further exacerbated by the escalating average prices of both new and used cars.
2. The COVID-19 pandemic has altered consumer behavior, with many buyers having experienced a period of economic uncertainty. Frankman mentions that some customers who made purchases during the pandemic now face negative equity situations, impacting their purchasing decisions.
3. There is a noticeable shift in consumer focus towards monthly payments rather than the sticker price or interest rates. Frankman emphasizes that keeping monthly payments within budget is crucial for closing deals, even if it means adjusting terms or trade allowances.
4. Rising interest rates post-COVID are posing challenges, especially for first-time buyers unaccustomed to higher rates. Frankman discusses how customers react negatively to higher interest rates, impacting their willingness to make a purchase.
5. Despite the challenges, there are promising developments in the automotive industry. Cole Frankman sheds light on the growing interest in electric vehicles, a trend that he has personally witnessed in his dealership. From handling Teslas to navigating tax credits, he is at the forefront of educating customers about EV technology and addressing their concerns, including those related to cold weather and EV usage.
"Affordability is going to be an issue for any buyer in the market." - Cole Frankman
