Vehicles are in high demand these days with American consumers seeking out both new and used models. Ordinarily, that would be welcome news for the nation’s dealerships. After all, high demand typically means higher sales. In turn, generating more satisfied customers leads to positive reviews and valuable word-of-mouth advertising. That brings in even more business and sparks even higher profits.
Of course, as so many of us are painfully aware, we’re not living in ordinary times right now. It seems the post-pandemic world is quite a bit different from the one we lived in before COVID-19 took its toll. As such, there simply aren’t enough vehicles available to meet the continually growing demand.
Taking a Closer Look at the Automobile Shortage
Back in 2019, vehicle sales were set to hit record highs, and that trend was expected to continue well into the coming years. Then, the pandemic took hold and left those predictions null and void. When the world came to a screeching halt, vehicle sales plummeted. Auto manufacturers began canceling orders for various components, including the microchips so many modern vehicles are now equipped with.
Microchip manufacturers were already experiencing a production slowdown because of widespread shutdowns and shelter-in-place mandates. When all those orders from the automotive industry were terminated, that made matters even more complicated. Now that everything is back up and running, both microchip and automobile manufacturers are struggling to make up for lost time.
Used vehicles are also in short supply. Many people are still trying to recover financially from the hardships brought on by the pandemic. Because of that, they’re holding off on trading in their vehicles for newer models and the payments that come with them. Others simply figure they’ll keep their current cars, trucks, and SUVs until the supply of new models picks back up.
Combating the Shortage to Remain Profitable
Some news reports indicate that certain dealerships are seeing record-breaking profits in spite of the current vehicle shortage. Many aren’t quite so fortunate right now, though. Those in that category are left looking for ways to overcome the issues and get their sales back up to acceptable levels. Fortunately, several options are at your disposal to keep customers coming in and rev up your profits.
Expand Your Financing Opportunities
Car shoppers are savvy these days. They spend weeks or even months researching vehicles before deciding which ones suit their needs and expectations. They also know to look for the most favorable financing terms and conditions. They seek out the best interest rates, lowest down payments, and other factors that will make car-buying more affordable.
That means even if you have the vehicle they want, they may not choose your dealership if you can’t meet their financing goals. On top of that, quite a few people may want to purchase a vehicle from you, but they may not qualify for financing based on your current system or network.
Expanding your financing opportunities can solve both of those issues. You’ll be able to offer the terms and conditions more prospects are looking for. You’ll also have the capacity to cater to more potential buyers. As a result, you’ll close more deals and bridge the gap you’re currently experiencing.
Use Technology to Your Advantage
Another solution would be to take a second look at the technology you’re currently using. No doubt, you have some type of software system in place, but is it truly providing the value your dealership needs? For countless dealerships, the answer here is no, and it’s hurting their profits from numerous perspectives.
If you don’t have a suitable software solution in place, it’s time to change that. Several options are on the market for dealerships. These include dealer, inventory, and customer relationship management systems to name a few. Keep in mind, the most effective solutions are those designed specifically for dealerships. They offer more tailored features and support for businesses like yours. In the event you have a system in place but it’s not serving you well, this would be a good time to upgrade.
Many people might question the wisdom of spending money on new software at a time when income is dwindling. As numerous business people have learned in the past, though, you often have to spend money to make money. Implementing a new dealership software solution may very well generate a significant return on your investment.
Keep in mind, those tools are only as effective as you make them. Be sure your staff understands how to use them once they’ve been deployed. Take the time to explain to your team how the features of the new software system will benefit them, your customers, and the dealership as a whole. Those extra measures will help encourage your staff to make the most of the tools you have in place.
Give Customers Added Value for Their Money
One effective solution for boosting sales and increasing profits is extending special offers to existing customers and potential buyers. Add a maintenance plan to your repertoire or expand upon the one you already have in place. Offer vouchers for free car washes with the purchase of a new vehicle. Consider giving buyers discounts on routine maintenance or offering complimentary tune-ups for a year.
You could also add a range of parts and accessories to your inventory. In addition to vehicles, offer car parts, wiper blades, aftermarket wheels, floor mats, and other essentials. Perhaps you could sell them to customers at a discount or offer free installation when they purchase those items. Any service, part, or accessory people feel they’re getting a deal on is an incentive to choose your dealership over the competition.
Make Yourself More Available
Yet another effective way to bring in more prospects and make more conversions is to cater to the public’s changing expectations. That means offering extended hours of operation if at all possible. People often need to be able to look at the vehicles on your lot after normal business hours. Some of them can only do physical car shopping on Saturdays and Sundays.
At the same time, you may need to ramp up your online services. Use the AI capabilities of your dealership software solution to provide chat services. Some dealerships are following the lead of real estate companies and offering virtual vehicle tours as well. You could even offer to bring vehicles to qualified leads’ homes for more convenient test drives.
No one is saying you should push your sales and customer service teams to their breaking points. Perhaps you could divide them into shifts or bring in additional staff members to cover the extra hours and efforts. Anything you can do to make matters simpler and more accommodating for prospects is sure to pay off.
Put Yourself Out There
None of those efforts will make a difference in sales if the public doesn’t know you’re offering them. Don’t be shy about marketing and advertising. Push those incentives and financing options. Host special events, like cookouts or having a local radio station on hand, to get the public’s attention. Advertise on the radio and put up banners outside your dealership.
Don’t overlook the importance of your website’s visibility, either. You may need to do some keyword research or bring in an SEO specialist to give your website an overhaul. From content marketing to paid advertising, there are plenty of ways to make your dealership more visible online and draw in more prospects. Paying more attention to your social media presence is also highly recommended.
Overcoming the Current Vehicle Sales Obstacles
If your dealership is facing hardships due to the vehicle shortage and other hurdles in the industry, you’re certainly not alone. Most are experiencing the same struggles. The measures we’ve listed here can help turn the tables in your favor, though. If you can’t incorporate all of them into your daily operations, at least try one or two of them. They’re bound to make a positive difference in your bottom line both now and in the future.
Ready to give your dealership a substantial boost? Contact Vantage Finance and connect with the best F&I partner in the industry today.
