February 17, 2014
www.usedcarnews.com
ON THE WEB: Digital Ads Exert Extra Influence on Shoppers
Off-Lease Vehicles Fill Used Pipeline
A new report finds that consumers are almost twice as likely to be swayed by autofocused digital marketing than the general population (21 percent vs. 12 percent). Moreover, automotive shoppers are 71 percent more likely to be influenced by digital advertising across multiple retail categories than the average consumer.
Dealership Experience Drives Purchases
A recent study by AutoTrader. com identified the “Dealership Experience,” and particularly “Customer Handling,” as one of the leading factors that determines where consumers make their purchases.
Money Motivates Car Salespeople
File photo HERE THEY COME: Experts say the market absorb a surge in vehicles because today’s lessors want to maintain residuals and demand remains high.
The majority of car salespeople decided to sell cars because of the income potential. A poll by Joe Verde found 28 percent of respondents said the income potential led to them becoming car salesmen.
By Ted Craig
Several analysts are raising concerns that a flood of off-lease vehicles will drive down used-car prices. Industry experts, however, remain cautiously optimistic that the market will absorb this extra inventory. The latest warning
comes from credit ratings agency Fitch. Fitch reports that increased “supplies of offlease vehicles, coupled with rising inventories and new vehicle production, could hurt the wholesale market and auto ABS performance metrics over the long term.” A surge in off-lease ve-
hicles did cause prices to drop in the past. But industry experts say this time is different. A main reason is today’s lessors are more invested in maintaining residual values. Lessors during the last decade’s great deluge of off-lease units consisted of a mix of manu-
facturers, banks and other finance companies. Most cars these days are leased either through a manufacturer’s captive finance arm or through a manufacturer’s private label program run by a bank. Either way they need to maintain a brand’s resale value. Continued on page 8
Report Claims Minorities Pay Higher Finance Rates Rush - Dated Material
By Ted Craig
A consumer advocacy group released a report that attempts to support the federal government’s recent crackdown on discrimination in auto lending. The survey from the Center for Responsible Lending finds that African Americans and Latinos attempt to negotiate loan pricing with car dealers more often than white consumers: 39 percent of Latinos and 32 percent of African Americans reported negotiating their interest rate, compared to only 22 percent of white respondents. Yet white
car buyers reported receiving lower interest rates - even those who didn’t try to negotiate at all, the report states. The report does not indicate if the minority consumers received lower rates than initially offered. Attorney Tom Hudson called the report an “advocacy piece that relies on other advocacy pieces.” Hudson said existing state and federal laws address some of what is in the report. Other criticisms already have an industry solution. “Menu sales accomplish much of what these folks say they want to accomplish,” Hudson said.
The auction has met its match. Find the inventory you need, directly from dealers you trust.
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See more on the back cover and page 9.
2/10/14 4:10 PM