As prices continue to rise, vehicle affordability is a pressing concern for many consumers and dealers. In today’s episode of Inside Automotive, we’re joined by Dennis Gingrich, Sales and Finance Director at the Niello Company, to discuss what he’s seeing in his markets.
Key Takeaways
1. Consumers are feeling the pinch from rising vehicle prices, which now average almost $50,000 for new cars. This, combined with general inflation, is leading to consumer fatigue. It’s imperative for dealers to find innovative ways to create a positive ownership experience despite these challenges.
2. Leasing is making a strong comeback as a viable option for consumers looking to mitigate high vehicle costs. Leasing offers a way to acquire desired vehicles without the full financial burden of ownership, which is crucial in the current economic climate.
3. The cost of vehicle repairs is increasing, with labor rates nearing $300 an hour. Additionally, modern vehicles are not as reliable as they once were. Dealers must prioritize educating consumers about maintenance policies and service contracts to foster trust and help manage these long-term costs.
4. Electric vehicles (EVs) are more expensive to repair due to the need for specialized skills and training. Insurance premiums for EVs are also higher, partly because of their rapid acceleration and heavier weight, which can lead to more severe damage in accidents.
5. The Niello Company is actively purchasing pre-owned EVs, particularly in regions like Sacramento, California, which has high EV adoption rates. Ensuring sales teams are well-trained on EVs is critical to meeting consumer demands and supporting the transition to electric mobility.
"When we think back not all that long ago in the heyday of COVID, you know, it was certainly easy to be frivolous with 2%, 3% money. And I think those days are long behind us."
