Electric cars are no longer a niche market. Instead, they’re rapidly becoming one of the most popular types of cars on the road today. That’s good news for car dealers, who use your electric-car salespeople as a guide on how to sell other new cars to you. But not so much for the rest of us, who have to deal with the collateral damage that comes from having so many salespeople selling so many different kinds of products to one end customer. Would you ever buy an additional car from your dealership? The average customer probably won’t. And that’s especially true if there are several salespeople competing for your dollars. Here’s why customers don’t buy more cars from their auto dealer than they need:
New car sales have plateaued
Automakers sold about 17.6 million new cars and trucks in the U.S. in 2016. That’s about the same number sold in 2005, just as the country was entering its post-recession era. Many industry experts attribute this steady sales volume to an aging population. There just aren’t that many 40-year-old car buyers. But it may also have something to do with customers’ reluctance to make a big purchase every five years. Most people would much rather make some smaller purchases, like a new pair of jeans or a new pair of shoes, than one large purchase every five years.
Customers only buy their next vehicle every five years
Around the time that you’re thinking about upgrading your vehicle, your average customer will be shopping for their next vehicle. And that’s about it. Most people wait about five years between their first and second car purchase, and about six years between their second and third purchase. There’s a strong economic incentive for many people to wait before purchasing a new car. The longer you wait, the cheaper gas becomes. And the cost of gas is a big factor in how long you decide to wait. If you wait a few years, your next car will get older and be more prone to breakdowns than a newer car. So you’ll be more prone to waiting longer before purchasing another vehicle.
More selling, less buying
The higher the sales volume, the better we are at buying things. The more things we buy, the more money we have to spend on other things. That’s a virtuous cycle that’s hard to disrupt. But when it comes to buying a car, customers have an especially hard time holding onto their money. So dealers are incentivized to sell a lot of cars, because when you sell a lot of cars, you buy a lot of things that customers need, like gas and air. The less you buy, the less money you have to spend on gas, repairs, and other things. That helps keep customers’ spending in check.
Salespeople are the main obstacle to a new car purchase
Auto dealers spend a lot of time and money training their salespeople. They train them to sell, train them to show cars, and train them to ask open-ended questions that encourage customers to say yes. All that training makes a lot of sense, because salespeople are the ones who have to get customers to say yes to buying a car. But the training also has a downside. The more salespeople are trained, the harder it is for any one salesperson to close a deal. That’s because a salesperson has to do more persuading and less closing when they’re working with multiple salespeople. But it’s also because multiple salespeople have to work harder to keep up with each other’s conversations. And that means less time spent on each sale, which means less chance to buy a car.
There are many reasons why customers don’t buy more cars from their auto dealer than they need. The most common one is the challenge of finding an open sales appointment. If you want to find out about new car sales, you should find a different dealer. You can also send your unwanted vehicle to help the environment and get you some money for your car.
Leave a Reply