The COVID pandemic certainly hit the auto industry hard last year, when new-car sales fell by a fairly steep 14.7%. Yet even as the number of vehicles sold dropped, the prices that people paid for those vehicles increased. In fact, by the end of 2020, buyers were spending more on new cars, trucks, and SUVs than ever before. And it was a similar story on the pre-owned side of the market.
Now, some of that certainly has to do with inventory issues. The pandemic shut down factories around the world, which significantly lowered the supply of new vehicles on dealership lots. This then had a ripple effect on used cars, since folks who couldn’t get new ones began driving up demand for pre-owned models as well. The experts do expect inventory levels to start approaching normal this year, but other factors are likely to keep pricing on the high side for the foreseeable future. It’s another hurdle in the sales process, but one way to help customers get over it is by convincing them of a vehicle’s value. Which, of course, starts with the right kind of vehicle comments.
The Pricing Picture
According to a recent story on CNET’s Road/Show, the average price of a new vehicle in December 2020 was $40,107. That represents a jump of more than 16% in just the past five years and includes an average down payment of $4,734 plus an average monthly payment of $581 on a 70-month loan with an APR of 4.6%. Meanwhile, at Manheim, even though wholesale used-car pricing slipped slightly in December, the overall 2020 Used Car Value Index remained up by 14.2% compared to 2019.
You also have to keep in mind that those are just averages. The range-topping model for the country’s best-selling vehicle — the Ford F-150 — starts north of $70,000.
Of course, as dealers, higher prices can often be the ticket to higher profits. It’s tapping into that revenue stream that can be tricky, because with most customers, you’re asking them to spend close to a year’s worth of salary, or more, on a new car or truck. The good news is that there are some smart ways to use your vehicle comments to convince your shoppers that whatever kind of vehicle they’re buying is more than worth their money.
You Get What You Pay For
One important thing to keep in mind here is that another key reason for the high price of today’s cars and trucks has to do with how much equipment these vehicles have. For example, rearview cameras are now mandatory on most new cars, and even many mainstream rides are available with high-tech driver-assistance measures like automatic braking, blind-spot monitoring, and adaptive cruise control. Customer demand for infotainment technology has likewise jumped in recent years. Nowadays, larger and larger touchscreens and advanced connectivity features have become must-haves in almost all segments of the industry.
Customers want more performance from the vehicles, too. Whether it’s added hybrid technology for efficiency or hardcore hardware for off-roading, the latest models have what it takes to go farther than before. All those upgrades are great, but they don’t come free.
How the Right Vehicle Comments Can Help
Fine-tuning your vehicle comments can be an excellent tactic for taking advantage of the current auto-shopping environment.
Right off the bat, you need to balance the limited amount of space you have for each comment with the wide range of equipment you’re going to be writing about. Take the time to slowly go over each vehicle’s content list to cherry-pick the higher-end features that will really get your customers’ attention. Your copy also needs to grab their attention with emotional language that gets them excited about buying a particular car, truck, or SUV. Then be sure to have someone carefully review your listing to eliminate typos and other errors. People feel better about spending money on big things with a company that pays attention to the little things.
