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Economy

Watching the Economic Pendulum?

Contributing Author: John Stephens Executive Vice President EFG Companies
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.

Categories
Dealership Training Economy

Positioning Leasing vs. Buying

Hollis Goode Blog Headshot

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.

Categories
Dealership Training EFG Companies Featured

Leasing is Booming. Is Your Team Taking Advantage of It?

Contributing Author: Stephen RoennauAccording to a recent article by the Associated Press, even though interest rates are low, many consumers are still choosing to lease their new car or truck rather than buy.

“Lenders have seen overall stability come back to the market since the recession and leasing has gradually returned as a larger part of many lender strategies,” said Melinda Zabritski, senior director of automotive credit at Experian Automotive.  With leasing on the upswing, the market is predicted to double in the next year.

With OEMs releasing their lease incentives this fall, it’s time to make sure your team is fully prepped for taking advantage of this fast-moving trend and increase future sales opportunities.

While sales business will always remain the backbone of a dealership, you know there is no business Leasing-on-the-rise-Callout lease business, especially with August lease incentives around the corner:

  • Leases keep customers returning to the dealership like clockwork for their service appointments
  • Leases help maintain an inventory of recent-model used cars
  • Leases have the significant opportunity to create customers for life

But, does your team have the knowledge and tools to close a lease?

With over 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 while understanding their individual benefits of closing a lease and the bigger picture of dealership profitability.

Find out more about our Lease Training Workshop and register today!