Here’s something to consider: Keystone research shows that 29% of people in the market for a used car will change their mind and decide on a new car instead. With sales of new cars in Canada hitting a record high last year, according to Statistics Canada, attitudes are slowly shifting toward buying new, breaking the used-only paradigm that many customers once subscribed to. Let’s examine why.
Better Insurance on New Cars
Most new cars have a higher market value and are more expensive to repair. However, new cars also typically come with cheaper insurance rates. This is because new cars often contain new technology and improved safety features that actually lower insurance. So while the smaller price tag and down payment of a used car is attractive, the savvy customer may be swayed by long-term savings.
Voice activation, Bluetooth integration, 360-degree exterior video, self-parking, even self-driving technology—new vehicles have more safety and entertainment features than ever before. This technology is advancing so quickly that what you get in a new vehicle today is substantially upgraded from a vehicle even two or three years old. Whether they’re parents, commuters or they spend a lot of time in their vehicle, some drivers view their vehicles as another device, and they’re willing to invest in technologies that make their time behind the wheel less stressful and more enjoyable.
Higher Interest Rates on Used Cars
New cars come with peace of mind, in the form of a manufacturer’s warranty, but this means a slightly higher price.
For those with more financial flexibility, low interest rates can decide a purchase—especially if the price difference between used and new is small. Edmunds compiled a chart comparing the monthly payments between used and new cars. While most of the used cars were cheaper, this was often by as little as US$1,000. In these cases, it’s a persuasive argument that by spending just a little more money, the customer can receive the many benefits of a new vehicle.
How to Reach Customers as they Look to Purchase
Stay competitive by reacting to changing consumer trends. With new car ownership on the rise, it’s important to ensure your new car stock is displayed online alongside used cars. Your inventory should also provide as much information as possible, including the make and model of duplicate cars at different locations. This is because a shopper who has decided on a make or model may initially browse your used stock. Here, they may spot your listing and decide to look at a new vehicle by the same OEM instead. This will bring visibility to your dealership and available vehicles, and might mean the difference in winning or losing a sale.
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