Equity Mine Older Vehicles in Your Service Lane
Americans Are Keeping Their Cars Longer and Longer
Americans’ concern about the state of the U.S. economy is at its lowest level on record, according to a new survey that’s been tracking the issue for decades. Gallup research this month found just 12 percent of Americans said an issue related to the economy is the most important problem facing the country. In August, the figure was 17 percent.
Despite a robust economy, increased consumer spending, and three consecutive years in which annual auto sales topped 17 million, Americans are continuing to keep decade-old vehicles running–and they’re only getting older.
What does this mean at your dealership?
Equity Mine Older Service Lane Vehicles
The age of light-duty vehicles in the United States rose 13 percent to an average of 10.5 years, according to a 2017 survey by the U.S. Department of Transportation. While this number is off the average of 11.6 years cited by research firm IHS in 2016, all signs point to America’s fleet – and its population of more than 223 million licensed drivers – growing older.
Pickup trucks, in particular, are staying on for longer. The average pickup was 13.6 years old in 2017 as compared to 11.2 in 2009. Vans jumped to 10.9 years (up 24 percent), SUVs rose to 8.5 years (up 20 percent), and cars’ average age increased to 10.3 years (up 8 percent).
Overall, the aging of the vehicle fleet suggests many households have delayed purchasing a new vehicle or have instead purchased a used vehicle. Lower-income households were most likely to hold on to older cars. On average, those reporting annual incomes of less than $25,000 drove 13-year-old cars, while those with incomes above $100,000 had nine-year-old cars.
Older vehicles, especially those bought new and driven by the Baby Boomer generation, are usually better-taken care of, have fewer miles and are more prone to visit your service department over local repair shops.
The great thing about older vehicles as equity targets is that the owner knows it’s not going to run forever. Plus, with the massive industry shift to SUV’s, you now have an opportunity to offer customers a real change from their current vehicle.
If a customer has chosen to hang on to their current vehicle, then they probably do it for cost saving, or they really like the vehicle. Either way, getting them physically into a new vehicle with all its features and benefits is the first step to a sale.
Leasing may be an option for these customers. Leasing avoids the sticker shock, and the vehicle trade-in could cover all of the upfront transactional costs.
How PV Mines Older Vehicles
Prospect Vision has the capability to search back 15 years. This can help the dealer source pre-owned vehicles. Plus, even if the person owned the car for 10 years, we can still show the old loan payment. This historical data can be used to show estimate trade and estimate terms for a newer vehicle based on the previous payment range. Most people are comfortable in a certain payment range.
So, there you go. Yes, customers are keeping their cars longer, but the good news is that they’re keeping the cars they bought from you longer. Sooner than later, they are going to need a new vehicle, and by maintaining diligence in the service lane you’ll be there when they do.