The DEETs Issue #4

The Vehicle Affordability Crisis: Challenges for Our Industry

There’s no doubt about it - we’re in the middle of a vehicle affordability crisis. According to new research from GfK Automobility, 60% of consumers who are planning to get a new car say that affordability is impacting their purchase decision.?

Let’s take a look at some of the main factors in the current vehicle affordability crisis.?

• Rising Vehicle Prices: Car prices have skyrocketed by 30% since 2019, with the average new car now costing $48,000. This price jump makes it tough for many to afford a new ride.

• Higher Interest Rates: Interest rates are up, which means heftier monthly car loan payments. With rates hitting up to 10%, buyers are thinking twice before taking the plunge. (Plus, the average length of finance contracts for new and used cars is 68 months - which really adds up!)

• Increased Cost of Ownership: Rising costs for insurance, fuel, maintenance, tolls, and parking add to the burden, making cars less affordable overall. 50% of middle-income Americans delayed new vehicle purchases in 2023 due to cost.?

• Shift in Consumer Behavior: More people, especially Millennials, are focusing on what they can afford each month rather than the total cost of the car. They’re looking for cheaper options and are okay with longer payment plans. After all, in March 2023, the average monthly after-taxes salary in the U.S. was $4,318. The average monthly car payment equals 20% of that!

• Industry Response: Car makers aren’t in a hurry to drop prices. They prefer selling fewer cars at higher profits, which doesn’t help with affordability. The new lower levels will be maintained at around 2.5 million units, compared to historical inventory levels between 3.0 to 4.0 million units.?

What's the bottom line for car dealerships? The pressure is on to balance your stock between new and used cars, possibly adding more affordable pre-owned options.

Plus, take the opportunity to partner with manufacturers to offer attractive incentives and rebates, making new cars more appealing.

Leverage data-driven tools like payment calculators and real-time inventory management to make informed decisions and enhance the customer experience - so you can stand out from the competition.?

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?? Trending

Apple is introducing new iOS “Vehicle Motion Cues” that might make passengers feel less queasy while looking at their phones en route. The animated dots on the edges of the screen combat carsickness by reducing the “sensory conflict” between your vision and the motion of the vehicle.?

If the sound of a motor purring is music to your ears, Lamborghini is currently selling vinyl records featuring V-12 engine sounds from their cars, dating back to the 400GT.?

Nissan’s car-themed “Smell my Dust” fragrance blends the aroma of cherry blossoms with the scent of tire smoke, to capture the olfactory essence of its Formula E racing team. (And it’s apparently not an April Fool’s joke.)

Miami Beach Police are now pulling up in a Rolls-Royce police vehicle and people are mad about it, calling them out for “conspicuous cop-sumption”

Featured Blog Post: Dealerships Vs. Vendors: Why Data Ownership Is So Important

It’s crucial for dealerships to take control of their data. ??

Vendors may rely on your data for tasks like marketing and managing inventory, but if you let them have full ownership of these accounts, you might lose control over your valuable information.?

In this blog post, we cover how to use proper data management to streamline your operations and improve profitability, so you can easily manage who sees your data and when.?

You can read the blog post here.?

Interesting Stats at a Glance

• According to stats from Forbes, trucks are the most popular type of vehicle, with 170,239,357 private and commercial truck registrations in 2022. That’s compared to only 98,573,935 registrations for cars. (Source)

• The average age of vehicles in the US has hit a new record. According to the stats from S&P Global Mobility, the average age of cars and light trucks in 2024 is 12.6 years old. (Source)

• Be careful out there this summer! Road rage incidents are more likely in the summer months of July, August and September. Studies found that the risk of car crashes is 7.7% higher during heat waves compared with cooler days. (Source)

• Sales of new cars in the EU jumped by 13.7% in April, their biggest jump since last October. Electrified models counted for 47.8% of these new cars registered in April. (Source)

• Did you know that women in the driver’s seat are 73% more likely to be severely injured in a car crash than men. (This is due to the fact that most safety features are based the standard crash test dummy, which was modeled on a male body.) (Source)

• When it comes to time spent commuting to work by state, New Yorkers come out on top with an average commute of 33.2 minutes. South Dakotas have the shortest commute, with an average time of only 17.4 minutes. (Source)

Authenticom Partner of the Month

This month’s Featured Partner is Gregory O'Brien, Data & Analytics Executive at Dealer eProcess, an award-winning website and digital marketing agency that helps dealerships enhance their customer experience and drive sales.?

Greg is an expert on Amazon advertising data. He spoke to us about Amazon’s power to reach car buyers with highly targeted ads and the future of automotive online retail.

Can you tell us a bit about Dealer eProcess and how it began?

Dealer eProcess was started in 2008 by a dealer, Joe Gillespie, who wanted to solve the common problems of automotive websites: low lead generation, limited customization, and inadequate customer support. The core business was providing websites and web-based tools to dealers to help them manage their business better. Later on, DEP added more tools such as digital retailing and inventory management and also digital marketing services specifically for Meta and Google products.

In 2021, they hired someone I had worked with for a long time to start an Amazon Streaming TV Division. That’s the group I work for.

What makes the Amazon platform so powerful for ad targeting??

91% of adults are Amazon customers. Amazon has incredibly accurate data on its customers. When you use the Amazon demand-side platform to deliver ads, you get to use Amazon’s first-party data.

That’s what makes it special. No one else has the volume, scope, or accuracy of data that Amazon has for targeting ad campaigns.

For connected TV campaigns, we deliver ads across all connected TV service providers. For online video or display campaigns, we deliver ads across the top 10,000 domains, reaching over 99% of the U.S. audience.

How does Amazon’s data accuracy help to improve ROI on ad campaigns?

Nobody else has a built-in address confirmation system like Amazon, which allows targeting at the household level with great accuracy.

Customers not only provide their address at the time of registration–they keep it updated. Otherwise, they wouldn’t get their packages.?

Most geotargeting is based on IP address resolution, not actual registration data. So, if I’m in Minneapolis, I’ll get ads for a dealer in Minneapolis.

But with Amazon, even if I’m in Minneapolis, I might see ads for dealerships in New Mexico because that’s where I live. On top of that, when you shop for auto parts on Amazon, we can use that car ownership data to decide what ads to serve.

What do you think lies ahead in the next few years for the future of online vehicle shopping?

I think that in a couple of years, it will be a very robust car shopping experience and a lot of people will choose to shop and buy on Amazon. They will be able to do every part of the transaction other than sign the paperwork and pick up the car.?

This process is in the early stages with Hyundai, but the plan is to expand it to all brands over time. Amazon aims to be a more complete shopping and purchasing platform than Cars.com, AutoTrader, or CarGurus.?

Anything that Amazon does, they very quickly become the largest online operator of that thing. For example, they are the largest seller of auto parts, but you could swap out the word “auto parts” for pretty much anything. They represent nearly 40% of all online commerce.?

However, this will support franchise dealer networks rather than bypass them. Eventually, people will sell cars on Amazon.com, and we will sell sponsored listings, but we will always work alongside off-Amazon advertising.

You can learn more about Dealer eProcess on their website and their Amazon Advertising services here.?

Buying From a Car Dealership Vs. Third Party Seller: What to Consider

When it comes to buying a vehicle - do consumers get a better deal buying from a dealer or a private seller??

It’s more complicated that you might expect, and there are strong arguments for and against both options. The stats seem to show a preference for purchasing from a dealership rather than 3rd party sellers.?

• This study by Vertu Motors states that four out of five people prefer to visit a dealership to buy a car.?
• Another study by What Car? found that 74% of car buyers intended to purchase their next car from a local dealer.?

What are some of the factors consumers will consider when deciding whether to buy from a dealership or a private seller??

Price Transparency: Private sellers often offer lower prices since they’re not aiming for a dealership’s profit margins, and dealerships might charge more because they throw in perks like warranties and extra services.?

But what consumers really care about is price transparency - are you being clear about what you’re charging them for and why? In Capital One’s 2023 Car Buying Outlook Report, car shoppers rated pricing and inventory transparency as the most essential factors for making their purchase decision.?

Warranty & Service: Dealerships usually include warranties on used cars, giving consumers peace of mind. They also have service departments for repairs and maintenance. Private sellers? Not so much—consumers are on their own for any fixes.

Risks: Private sales come with higher risks—hidden problems and less transparency about the car’s history. Dealerships tend to inspect vehicles thoroughly and offer more transparency.?

Financing: With private sellers, consumers will need to secure their own financing. Dealerships offer financing options, though they might have higher interest rates. (The average new car auto loan rates in March 2024 were 12.65% for those with a credit score of 700-749.)??

Inspections & Certifications: Dealerships offer certified pre-owned vehicles, inspected and certified by the manufacturer. Private sellers don’t, so consumers will need to arrange your own inspections.

In the end, it all comes down to priorities.?

Consumers who want the security of a warranty and more convenience might be more likely to buy from a dealership, especially since they know the dealer has a reputation to uphold.?

Yet, those who are looking for a bargain and are willing to take on more risk, might be open to a private sale.?

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Snippets

Dead men tell no tales (and buy no cars). A car dealership in Mesa, Arizona approved financing for a Lexus for a “Steven Meyer.” It was only a day after he’d driven away in the vehicle that they found out Meyer had died on April 1st and they’d been defrauded by an identity thief.?

EV car sales growing in China? History was made in April when sales of new energy vehicles (EVs and PHEVs) exceeded half of all car sales in China (the largest car market in the world).?

Oh yeah, and floating cars too. Speaking of China, this new Chinese “floating” car vertical parking system can house up to 12 cars in a space usually designed to park two.?

Helpful Resource: If you’re looking for a super-nerdy deep-dive into credit reports and the financial function of a successful automotive dealership, this episode of the Millionaire Car Salesman Podcast, “From Lead to Loyalty: Harnessing Special Finance Strategies to Maximize Sales Profit and Customer Satisfaction” will really get you thinking.?

If you’re looking for a sign, this is it. A man in the US was able to stop a self-driving car by simply wearing a t-shirt with a print of a stop sign on it, proving that autonomous cars are kinda smart, but not as smart as we might think.?

Norway: Electric Vehicles Could Overtake Petrol Cars by The End of the Year

Norway is currently leading the charge (pun intended) when it comes to electric vehicles. An incredible 82.38% of new cars sold in Norway in 2023 were EVs - more than any other type of car!

Why is Norway a Global Leader in EV Adoption?

How did this mostly rural Scandinavian country become the world leader in EV adoption? There are a few different factors driving the shift, including:

• Norwegian Government Incentives: The government of Norway has made driving an electric vehicle pretty sweet, by offering tax breaks, reduced tolls and access to bus lanes - making EVs easier on the wallet and more practical for everyday drivers.?

• Widespread Charging Infrastructure: Norway has rolled out a vast network of charging stations, making it easy for drivers to charge up anywhere they are. In Norway there are more than 3,000 public charging stations and 7,753 fast chargers across the country.?

• Environmental Awareness: Norwegians are generally nature-loving and eco-conscious, and this green mindset makes EVs the cool choice. In fact, driving an EV has become the new status symbol there.?

• Low Operating Costs: On top of all the government incentives, EVs are cheaper to own in Norway. There’s no hefty import duties or VAT - and lower maintenance costs.?

Pretty cool to see what a difference it can make when savvy government policies, public buy-in and top-notch infrastructure comes together, huh?

Could the USA catch up to Norway when it comes to switching to electric vehicles? According to this study, nearly half of all American shoppers are not considering an EV - but this is predicted to change.?

Cox Automotive believes that with lower prices, technology improvements and an improved charging network in the US, many as 90% of new and used car buyers in the US will consider an EV by 2033.?

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Around the Web

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Lady Gaga hit the red carpet wearing an outfit by designer SELVA that featured what looks like car’s front bumper wrapped around her torso. When asked what specific car part it was she quipped, “I don’t know. I’m not a mechanic.”?

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A brewery worker in Belgium was pulled over under suspicion of a DUI and tested at 4x over the legal limit - despite not having a drop of booze to drink.?

Turns out, the brewer’s yeast he was exposed to in his job had entered his body and was turning the carbs he ate into alcohol - in a rare condition called “auto-brewery” syndrome.?

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Bored and feeling artistic? Quick!Draw gives you 20 seconds to draw an image based on a prompt, then uses AI and machine learning to try to guess what you have drawn. (Kinda like playing Pictionary with a robot!)

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Did you know that modern car thieves can hack into your key fob signal? Here are some smart ways you can protect your vehicle from keyless theft.?

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Speaking of car thieves, this would-be grand theft auto in Boulder, Colorado was quickly thwarted - because the stolen truck had a manual transmission and the thief had no idea how to drive it.?