Dealership Training Economy EFG Companies Electric Vehicles Industry Trends

Educational Revenue Opportunities

Attention agents – it’s time to dust off your playbooks, education resources, and training best practices. Your retail automotive and powersports clients are going to need some knowledge in order to have a successful second half of 2023. Gone are the days when sales teams simply responded to pent up demand and took orders for units. Economic headwinds and rising interest rates are prompting consumers to delay purchases. And growing inventories are erasing those healthy margins logged over the last three years. Agents who focus on electric vehicle (EV) education, debt protection products, and sales best practices will prove invaluable to dealers who need to ramp up their level of customer service for a profitable close to 2023.

Let’s look at some of the issues facing your clients – and how you can help them overcome the challenges.

According to Kelley Blue Book and Cox Automotive, May new vehicle inventory reached its highest level in two years. The average listing price ended the month at $47,172, four percent higher than a year ago. To add insult to injury, interest rates on auto loans also continued to climb in May. Your dealer is working with a lot full of high-priced vehicles and consumers who are increasingly uncomfortable taking out a loan for a new car.  These challenges spell opportunity for agents to serve as the trusted resource for dealers, providing their staff with the tools and resources to make the most of every sale and maximize revenue opportunities.

Dealership Training

Is Your Team Made Up Of Order Takers or Sellers?

Dealerships and salespeople alike have reaped the benefits of healthy profit margins over the last few years. However, just as the margin pendulum swung deep into seller’s market territory, it’s beginning its backward trajectory into a buyer’s market.

While inflation and lack of inventory have kept vehicle prices high. Interest rates, climbing debt, and lack of affordable vehicles are pressuring more consumers out of the market. According to Experian, during the first quarter of 2023 the average APR for prime consumers fell between 6.40 percent for new vehicles and 8.75 percent for used vehicles. Think about that for a second. If a prime consumer can’t get a rate below 5 percent, what does that mean for nonprime and subprime consumers?

As of 2021, Experian reported that nearly one in three Americans had a subprime credit score. So approximately 33 percent of your customers don’t qualify for an 8.75 percent APR. Their range spans from 8.86 percent to 21.32 percent. On top of the APR issue is rising debt. Because consumers purchased both new and pre-owned vehicles priced well above historical norms for the last three years, those three-year-old consumers are returning to dealerships with significantly less of their auto loan paid off. According to Edmunds’ fourth quarter data from 2022:

Dealership Training Economy Industry Trends

Preparing for a Different Kind of Sales Season

It’s officially fall which brings football, cooler temperatures, and 2022 vehicle models. We can predict that at least two of those things are happening this year. New vehicle production challenges continue to linger. Chip shortages, supply chain disruptions and factory shutdowns still plague our need for new inventory.

According to Cox Automotive, only 1.2 million new vehicles were ready to roll onto lots as of July 19th, compared with the average inventory of 3 million. In August, dealers reported just under 1 million new cars on lots, 72 percent lower than August 2019. The major manufacturers have projected production reductions well into the fall, making the new inventory forecast even gloomier.