Category: Economy

Benefits of a CPO Lease

Post author By efgmarketing
Post date August 31, 2016

Contributing Author:
Hollis Goode
Regional Vice President
EFG Companies

According to the NADA Used Car Guide, more than 3 million vehicles will reach the end of their leases in 2016. This represents a 35 percent jump in off-lease volume. With such a huge increase in reliable, late-model, pre-owned vehicles, the industry has already seen used vehicle prices drop to become more competitive. Now, dealers are more concerned with maintaining front-end profitability while still being competitive.

So, how can dealers accomplish their profitability goals while maintaining a competitive edge? The answer lies in certified pre-owned programs. Today’s consumers are much more concerned with getting more value for their money. That’s part of the reason why pre-owned vehicles have been top sellers in recent years. Dealers can further utilize this trend to sell higher-priced pre-owned vehicles with a CPO program.

According to proprietary research from EFG Companies, 32 percent of consumers would look to purchase a vehicle in the 61 – 150k mile range, of which, 62 percent would actively seek for that vehicle to be covered by a CPO program.

Tags certified pre-owned, CPO, CPO Lease

Economy

Watching the Economic Pendulum?

Post author By efgmarketing
Post date May 24, 2016

Contributing Author:
John Stephens
Executive Vice President
EFG Companies

The retail automotive industry has been riding a five year high with average 8.30 percent year-over-year increase in unit sales from 2011 to 2015 according to data from Wards Auto. With the rapid pace of automotive industry growth lending requirements loosened, longer term loans became the norm and more customers who had been holding off on purchasing a vehicle returned to dealerships.

Just like within any economic cycle, after a period of expansion, the pendulum swings to a period of economic reduction. And, everyone is avidly watching the signs to see when that pendulum will start to swing.

Experian’s latest State of Automotive Finance Market Report listed average new vehicle loan terms increased to 67 months in 2015, while used vehicle loan terms increased to 63 months. This has resulted in a significant growth of negative equity on car notes.

Tags EFG, EFG Companies, Experian, F&I, John Stephens, NADA, NADA UCG, NADA Used Card Guide, vehicle service contracts, vsc, Wards Auto

Dealership Training Economy

Positioning Leasing vs. Buying

Post author By efgmarketing
Post date June 17, 2015

Contributing Author: Hollis Goode, Regional Vice President, Dealer Services, EFG Companies

Leasing continues to gain considerable ground in the automotive space as manufacturers place greater emphasis on lease incentives. Is your team taking advantage of this trend?

According to a recent report from Experian, leasing hit a record of 26.7 percent of U.S. new-vehicle volume in the first quarter of 2015. This represents a 1.1% year-over-year growth and the fourth time in the past five quarters when lease penetration topped 25 percent. With this growing trend, we can expect more manufacturer lease incentives in the second half of this year, meaning now is the time to ensure your sales team can not only close a sale, but also a lease.

Ask yourself, does my team know how to positional leasing versus financing? Not sure? Refresh your team by focusing on the basics.

Help customers understand depreciation. While they probably know that all vehicles depreciate as soon as they leave the lot, they probably don’t make the connection that vehicles depreciate at the same rate whether they lease or buy. The only difference lies in what they pay for. With leasing, customers only pay for the time/miles they drive. However, with buying customers commit to the entire cost of the vehicle, no matter how far they drive it or how long they keep it.

Tags EFG, EFG Companies, Experian, Hollis Goode, vehicle leasing