With signs of pre-pandemic norms returning to the market, car dealers are beginning to consider alternative strategies, such as leasing, to maintain their profit margins. Understanding the industry’s current trajectory will ensure your storefront is prepared for the future.
On this episode of Driving Solutions, host Jim Fitzpatrick is joined by Aaron Bickart, general manager and executive vice president at OfferLogix. Bickart is a business development savant with a proven track record of anticipating trends and implementing successful strategies. His company, OfferLogix, is an industry leader in car dealer payment calculators and online quotes. Now, he shares his predictions for the future and discusses the crucial role leasing will play in the retail automotive sector’s continued success.
Key Takeaways
1. New vehicle prices have started to decline in 2023. Automakers have resumed their efforts to reclaim market share, creating a surge in inventory at the cost of reducing profitability. Car dealers will need to find new ways of generating sales in the coming months if they hope to maintain their revenues.
2. Despite the combined impact of interest rates and high prices, leasing has yet to see a notable return as an alternative form of car ownership, even though it has multiple advantages over traditional ownership. However, Bickart expects this to change before the end of the year.
3. Electric vehicles continue to earn mixed reviews from car dealers, largely depending on their local markets. Affordable pricing will be necessary to drive wider adoption. However, leasing again presents an opportunity for buyers to take on lower payments.
4. Many OEMs do not offer a leasing program, making it more difficult for car dealers to create their own in a way that functions properly and attracts buyers.
5. With the first half of Q4 in the past, Bickart ultimately expects the automotive industry to finish the year strong.
6. Bickart expects to see a massive surge in electric vehicle adoption over the next two to three years, predicting a market share as high as 50% by the end of 2026.
"Most dealerships don't understand how to lease a vehicle. They don't know how to talk [their customers] into leasing a vehicle. So we have to figure that out." — Aaron Bickart
