Autohitch
Declining Vehicle Ownership Could Result In More Parts & Service?
There is no doubt that the exact future of vehicle ownership is a hot topic and one that many cannot agree on. Vehicle transactions may have been up on average, but a record number of those were leases. In addition, Uber and Lyft continue to grow in popularity especially in densely populated metropolitan areas where vehicle ownership has always and will always be an expensive proposition. Add to the mix the up and coming new option of Car Sharing, a way to rent other people's cars for hours or days at a time. So, if vehicle ownership slows, wouldn’t it be fair to assume that along with it would be a decline in parts and service? No, not even close!
You see, vehicle owners can choose when or if to do maintenance. If you drive for Uber, car share with Turo, or Lease, you don’t get that luxury. You either have standards you must meet on an annual basis or, as in the case of a lease, are required to come in at certain milestones for service without question. If you are driving for an Uber like service, or renting your vehicle out with a car sharing program, you are also in all likelihood using using using the vehicles more than the average car owner. This of course means more wear, tear, and inevitable maintenance.
If you add all of this up, as we have, it’s hard to conclude that engine fluids, aftermarket parts, and service departments (Mechanics) will see anything but a significant uptake in business in the coming years. When you think about it, going to the “Shop” for non owners is similar to the path health insurance tool: We used to only buy it when we thought we needed it, now we don’t have a choice.
Autohitch
Is a “NO HAGGLE PRICE” a Good Deal to Win over Millennials?
No Haggle or Discount? What is the future of Car buying? In our opinion it isn’t a question of either or, it’s a how much of each is just the right mix. There is a segment of those who will forgo a serious bargain in return for a faster process and those who want to drive away knowing they got the best deal they could. The best ratio is probably determined by taking a look at the soon to be largest market of buyers, Millennials.
It is often assumed that millennials are the “Shopping Cart” consumer because their preferences are usually centered around simplicity and ease of use, tendencies that one would assume favor a “No Haggle” approach. But, what the Automotive Industry may be overlooking is that millennials are also the generation that grew up in the Great Recession, a difficult time brought on in great part by atypical spending with money that was too easy to get. They saw their parents become financially overexposed and many had to witness as their families lost much or most of what they had spent their lives accumulating. Needless to say, it was those types of experiences that shaped a generation that we now see favoring mobility and flexibility when it comes to financial decision-making and ownership.
The automotive industry doesn’t have to look very far to see these habits playing out as a recent JD Power survey discovered. They found that the millennial car buyer spends a week longer than a baby boomer deciding on which car to buy and then 4.5 hours longer during the process of buying it. For those who favor the “No Haggle” model whose biggest value proposition might be that of saving time, this could be something to be concerned about. However, millennials also asked more questions about credit and tended to favor bargain vehicles or deals which could favor a One Price model that provides an initial discount as part of its proposition.
In conclusion, Millennials care about the price they pay just as we can agree any generation does, but millennials may exceed any other in a concern for the ability to have choices and flexibility in coming to that price. One price, no matter how carefully worded, IS saying to your customer: “This is what we have determined to be a good price, take it or leave it”. Is taking that flexibility away from the millennial generation an overall winning proposition when they have demonstrated the willingness to put in more time and work for a better deal? Like the answers to most questions about the future, only time can tell…
For more information on a new type of car buying service, visit us at Autohitch.com
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Autohitch
Did I just see a Car Listed for One Dollar? Does this mean that Pricing tool I used is Flawed?
Car Dealers have been telling consumers for years that a deep focus on the cheapest price is not actually in their best interests, and now it appears they may have been right in more ways than even they thought.
The past decade has seen the rapid growth of websites with widgets and algorithms designed to show car shoppers just how little they may be able to spend on a vehicle. Using this information, the consumer typically then begins searching online listings where they often apply a “Lowest Price First” or “Best Deal First” filter hoping to find that special bargain. Well, no good business just sits around hoping that they can acquire more customers, they are actively thinking of the next way to do it and as we know, some are more creative than others.
Somewhere, someone got the idea that if everyone is looking for the cheapest price, and every listing
site out there is designed to show it to them, then be the cheapest! Of course, I don’t mean the cheapest car, I mean the cheapest listed price. What they appear to be doing is putting in 1$ in the “Listing Price” and then at the top of the vehicle description they are declaring that the 1$ is their dealer fee or down payment or something justifiable of the move. If the software starts picking up that your 20k car is listed for 1$ they are bumping up to the Down Payment or Monthly payment amounts.
The bigger question for both dealers and consumers is what effect this trick is having on the pricing tools people are using to then negotiate against a seller? Are these tools able to catch these prices when they scan the internet every day? If they are, how? If they are not, why continue to use them to rate sellers prices?
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