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EFG Companies

The Infrastructure of Electric Vehicle Sales

Electric vehicles are a hot topic these days – for consumers and automotive dealers alike. However, not all electric vehicles are alike. Like any new product, consumers can be confused and overwhelmed. A dealer’s success in selling any type of electric vehicle requires your staff to be knowledgeable on the product details and trained to guide the customer through the buying decision process.

Electric vehicles on the road today

Battery Electric Vehicles (BEVs)

BEVs—also referred to as “all-electric vehicles”—run on electricity only and are recharged from an external power source. They are propelled by one or more electric motor powered by rechargeable battery packs.

Plug-In Hybrid Electric Vehicles (PHEVs)

PHEVs also use batteries to power an electric motor and can be recharged from an external power source, but they incorporate a smaller internal combustion engine that can recharge the battery (or in some models, directly power the wheels) to allow for longer driving ranges. When electricity is unavailable, PHEVs can run on gasoline alone.

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Industry Trends

Chances Are You Need Inventory?

These days, retail automotive dealers are getting a refresher on supply and demand economics.

On the supply side, the pandemic-induced slow down put a crimp on the volume of new vehicles as factories shut down and parts suppliers faced significant shipping challenges. In April 2020, a record low 103,000 new vehicles were manufactured. By contrast, a little over 2 million vehicles were built in January 2021 and Edmunds forecasts that 15.5 million new cars will be sold in 2021, a 6.5 percent lift compared to last year. New vehicle manufacturing is clearly back on line, yet some glitches will remain as the supply of certain semiconductor chips and electronic components are still scarce.

On the demand side, new car prices are skyrocketing. In December 2020, the average transaction price for a new vehicle hit an all-time record high of $40,573. These rising prices are driving many people out of the new car market, forcing people to look elsewhere for a vehicle. The used vehicle market is also experiencing pricing challenges. According to the Manheim Used Car Index, Wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased 3.79 percent month-over-month in February. This brought the Manheim Used Vehicle Value Index to 169.2, a 17.9 percent increase from a year ago and a record high for the Index. For high-demand vehicles such as SUVs and pickup trucks, the price jump is even higher.

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Uncategorized

Boost Your New Car Sales Through Leasing

Leasing: Does Your Team See the Light?

Contributing Author: Stephen RoennauLease incentives are around the corner, just in time to take advantage of record lease penetration. Recent vehicle registration data released by Polk stated that new cars accounted for 29 percent of all sales through May, which puts the year on pace to top last year’s rate of 27.6 percent. This is the highest penetration of new cars in the last five years. According to Edmunds, leasing is behind this breakthrough accounting for 25 percent of new cars sold.

At this time, it is vital that your sales team is trained to not only close a sale, but also a lease. The most important question to ask yourself is, “Does my team know how to position leasing vs. a traditional loan?” If you don’t know the answer, then these tips will help refresh your team until you register for EFG’s lease training workshop.

New vehicle sales are outpacing last year’s totals. Why? According to Edmunds, the reason is the surge in leasing, which is on track to smash last year’s record penetration rate of 22%.

Everyone knows that all vehicles depreciate in value as soon as they are driven off the lot. However, few consumers make the connection that their vehicle depreciates at the same rate whether they lease or buy. The only difference lies in what they pay for. Think about what most customers say is their single biggest expense is in owning a vehicle. They either say their monthly payment or gas. The truth is that their single biggest expense may be the hidden cost of depreciation.

Most customers don’t learn about this expense until it’s too late – at trade-in time, when dealerships offer them less than what they expected or needed. Offering them a lease is a great way to manage the depreciation expense and make the trade-in process easy.

When positioning leasing, just as with purchasing, your sales team needs to understand their customers’ needs.
If they have a predictable lifestyle, drive a low average number of miles, properly maintain their car, and want to make trade-in easy, then leasing may be a good option. Top selling points for a lease include:

    • You are protected from market risks that affect the value of your vehicle.
        • Rebates
        • Bad press
      • Discontinued model
    • You may lower your monthly payment without being stuck in a long loan.
  • You get to drive a newer model car with the latest technology and safety features.

Advise your customers that when they buy, they commit to the entire cost of the vehicle – no matter how many miles they drive or how long they keep it.

While leasing is on the rise, there will always be people who prefer to buy. That’s why it’s important to ask the right qualifying questions before positioning a lease, such as:

    • How often would you like to trade in your vehicles?
    • When was the last time you paid off a vehicle and kept it for a while?
    • How many miles do you drive per year?
    • Do you trade your vehicles or sell them outright?
  • When was the last time you were happy with the amount offered for your vehicle at trade-in?

In the end, your sales team needs to help their customers decide what matters to them. The decision to lease or buy depends entirely on their lifestyle and what they feel comfortable with.

With more than 35 years of insight into the consumer mindset in the auto retail space, EFG’s Transcend Group knows how to train your team to readily position the benefits of leasing compared to 3, 4 and 5 year retail loans. They also gain a deeper understanding of how closing a lease benefits them and the dealership.

To take your team members beyond the fundamentals of leasing, register for our Lease Training Workshop today before it’s too late!