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Consumer Sentiment: The Missing Link Dealerships Need to Move Forward

Published: July 28, 2020 by Guest Contributor

Young woman standing against glass window at car showroom

Stay at home orders are beginning to lift across the country, and dealers are beginning to move forward. But, even as these orders lift, that doesn’t mean dealers can or should go back to the strategies they had laid out for the year, as so much has changed these last few months.

As reopening occurs, it’s important to keep in mind that the situation is still fluid for many consumers, and marketing strategies need to reflect that. While creating dynamic strategies may sound like a large ask, data can help you create informed decisions that quickly adapt to a changing environment. Among the available data sets, one of the most telling right now is consumer sentiment, which can help you create a more human connection with consumers. Better understanding consumers’ situations enables you to create more effective strategies that show consumers you’re here to help them meet their most pressing needs.

Experian’s research found that 23 percent of consumers are looking to purchase a vehicle in the next few months, as of July 1. Of those consumers, 59 percent plan to move forward with their purchases, and 34 percent plan to purchase something less expensive than planned. While these are informative metrics, the data becomes truly actionable when analyzed by generation and population size.

Consumer sentiment across populations  

We looked at the same data across urban, suburban and rural areas, and found that urban residents show the highest propensity to be in-market for a vehicle in the next few months at 42 percent—which is even higher than the national average of 23 percent. In contrast, only 14 percent of consumers in suburban areas and 13 percent of consumers in rural areas are looking for a new vehicle in the next few months.

If your dealership is in an urban area, now is a great time to identify your local in-market vehicle shoppers, typically located within three zip codes around your dealership, and identify their most pressing needs. Where is the consumer in their car-buying journey? Do they want to buy something in a few weeks, or a few months? Do they need to exchange a lease? Was there a vehicle incident? Once you identify where they are in their journey, your communication can help point them to the right option.

When you take a closer look at the urban data, it also shows us that consumers are interested in exploring all their options. Of the 42 percent of urban consumers looking to purchase a vehicle in the coming months, 69 percent plan to continue with the purchase as planned, though 32 percent are planning to purchase something less expensive than originally planned, and 27 percent of these consumers are considering leasing, instead of purchasing. It’s important for you to understand this and meet consumers where they are by presenting a variety of options. This shows that you’re helping to meet their most pressing needs – and budget.

if your dealership has more rural customers, a different tactic, such as focusing on bringing customers into the service drive, could be more effective. You could also use this time to analyze the vehicles are in your surrounding market to see which have open recalls or maintenance needs. This can help build a relationship that will encourage consumers to return to your dealership when they’re ready for a purchase.

Generational differences

Another way to focus on the data is by generation, where several interesting insights emerge. As of July 1:

  • Only 8 percent of Baby Boomers are considering a vehicle purchase in the next few months
  • Millennials (29 percent) and Gen X (35 percent) are the most interested in purchasing a vehicle in the next few months
  • Of those looking to purchase a new vehicle, Gen Z (28 percent) is the most interested in leasing instead

While these insights are informative on a national level, that data will only take you so far. Dealers need to drill down and focus on your local market and identify who’s around your dealership. When is the last time you did a profile of the area? It may be time for an update to better understand who your most likely consumers are and in what they are most interested.

Understanding your local market, has always been key to success for dealerships. But now, you need to understand the attitudes of your potential customers in order to manage the current environment and to address consumers’ most pressing needs. Strategies that are informed by data, such as consumer sentiment, will ensure that you lead with empathy and build relationships that will thrive in the days to come.

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Published: March 1, 2025 by Jon Mostajo, test user

Electric vehicle (EV) registrations are re-gaining momentum as a wave of more affordable models hit the market, pushing more consumers than ever to make the transition. According to Experian’s State of the Automotive Finance Market Report: Q3 2024, EVs made up 10.1% of new vehicle financing this quarter, increasing more than 30% from last year. Furthermore, 45% of EV consumers leased their vehicle in Q3 2024—resulting in EVs accounting for 17.3% of all new vehicle leasing. Of the top five transacted EV models this quarter, Tesla accounted for three—with the Tesla Model Y leading at 31.8%, followed by the Tesla Model 3 (14.3%) and Tesla Cybertruck (4.9%). Rounding out the top five were the Ford Mustang Mach-E (3.9%) and Hyundai IONIQ 5 (3.7%). Interestingly, data in the third quarter of 2024 found that consumers’ financing decisions vary based on the EV model they’re looking at. For example, 76.5% of consumers purchased the Tesla Model Y with a loan and 13.1% opted for a lease; on the other hand, only 8.5% of consumers bought the Hyundai IONIQ 5 with a loan and 78.7% chose to lease. Despite the rising interest in leasing as more incentives and rebate programs roll out, some consumers still prefer to purchase their EV with a loan. Understanding financing patterns based on different models is key for professionals as they cater to the diverse preferences and determine the long-term viability of certain EVs and their potential for leasing renewals. Snapshot of the overall vehicle finance market As the finance market continues to stabilize, it’s notable that the average interest rate for a new vehicle fell year-over-year, going from 7.1% to 6.6%, respectively. However, average new vehicle loan amounts increased $736 from last year, reaching $41,068 in Q3 2024, and average monthly payments went from $732 to $737 in the same time frame. On the used side, average interest rates saw a slight uptick to 11.7% in Q3 2024, from 11.6% last year. Meanwhile, the average loan amount dropped from $1,195 over the last year to $26,091 this quarter and the average monthly payment declined from $538 to $520 year-over-year. With the overall market shifting and EVs re-sparking interest, automotive professionals should leverage how consumers are purchasing their vehicles based on average payments and the fuel type as more incentives are being offered. Monitoring these insights can unlock opportunities for tailored financing solutions that meet the needs of consumers as preferences continue to evolve. To learn more about automotive finance trends, view the full State of the Automotive Finance Market: Q3 2024 presentation on demand.

Published: December 5, 2024 by Melinda Zabritski

We are squarely in the holiday shopping season. From the flurry of promotional emails to the endless shopping lists, there are many to-dos and even more opportunities for financial institutions at this time of year. The holiday shopping season is not just a peak period for consumer spending; it’s also a critical time for financial institutions to strategize, innovate, and drive value. According to the National Retail Federation, U.S. holiday retail sales are projected to approach $1 trillion in 2024, , and with an ever-evolving consumer behavior landscape, financial institutions need actionable strategies to stand out, secure loyalty, and drive growth during this period of heightened spending. Download our playbook: "How to prepare for the Holiday Shopping Season" Here’s how financial institutions can capitalize on the holiday shopping season, including key insights, actionable strategies, and data-backed trends. 1. Understand the holiday shopping landscape Key stats to consider: U.S. consumers spent $210 billion online during the 2022 holiday season, according to Adobe Analytics, marking a 3.5% increase from 2021. Experian data reveals that 31% of all holiday purchases in 2022 occurred in October, highlighting the extended shopping season. Cyber Week accounted for just 8% of total holiday spending, according to Experian’s Holiday Spending Trends and Insights Report, emphasizing the importance of a broad, season-long strategy. What this means for financial institutions: Timing is crucial. Your campaigns are already underway if you get an early start, and it’s critical to sustain them through December. Focus beyond Cyber Week. Develop long-term engagement strategies to capture spending throughout the season. 2. Leverage Gen Z’s growing spending power With an estimated $360 billion in disposable income, according to Bloomberg, Gen Z is a powerful force in the holiday market​. This generation values personalized, seamless experiences and is highly active online. Strategies to capture Gen Z: Offer digital-first solutions that enhance the holiday shopping journey, such as interactive portals or AI-powered customer support. Provide loyalty incentives tailored to this demographic, like cash-back rewards or exclusive access to services. Learn more about Gen Z in our State of Gen Z Report. To learn more about all generations' projected consumer spending, read new insights from Experian here, including 45% of Gen X and 52% of Boomers expect their spending to remain consistent with last year. 3. Optimize pre-holiday strategies Portfolio Review: Assess consumer behavior trends and adjust risk models to align with changing economic conditions. Identify opportunities to engage dormant accounts or offer tailored credit lines to existing customers. Actionable tactics: Expand offerings. Position your products and services with promotional campaigns targeting high-value segments. Personalize experiences. Use advanced analytics to segment clients and craft offers that resonate with their holiday needs or anticipate their possible post-holiday needs. 4. Ensure top-of-mind awareness During the holiday shopping season, competition to be the “top of wallet” is fierce. Experian’s data shows that 58% of high spenders shop evenly across the season, while 31% of average spenders do most of their shopping in December​. Strategies for success: Early engagement: Launch educational campaigns to empower credit education and identity protection during this period of increased transactions. Loyalty programs: Offer incentives, such as discounts or rewards, that encourage repeat engagement during the season. Omnichannel presence: Utilize digital, email, and event marketing to maintain visibility across platforms. 5. Combat fraud with multi-layered strategies The holiday shopping season sees an increase in fraud, with card testing being the number one attack vector in the U.S. according to Experian’s 2024 Identity and Fraud Study. Fraudulent activity such as identity theft and synthetic IDs can also escalate​. Fight tomorrow’s fraud today: Identity verification: Use advanced fraud detection tools, like Experian’s Ascend Fraud Sandbox, to validate accounts in real-time. Monitor dormant accounts: Watch these accounts with caution and assess for potential fraud risk. Strengthen cybersecurity: Implement multi-layered strategies, including behavioral analytics and artificial intelligence (AI), to reduce vulnerabilities. 6. Post-holiday follow-up: retain and manage risk Once the holiday rush is over, the focus shifts to managing potential payment stress and fostering long-term relationships. Post-holiday strategies: Debt monitoring: Keep an eye on debt-to-income and debt-to-limit ratios to identify clients at risk of defaulting. Customer support: Offer tailored assistance programs for clients showing signs of financial stress, preserving goodwill and loyalty. Fraud checks: Watch for first-party fraud and unusual return patterns, which can spike in January. 7. Anticipate consumer trends in the New Year The aftermath of the holidays often reveals deeper insights into consumer health: Rising credit balances: January often sees an uptick in outstanding balances, highlighting the need for proactive credit management. Shifts in spending behavior: According to McKinsey, consumers are increasingly cautious post-holiday, favoring savings and value-based spending. What this means for financial institutions: Align with clients’ needs for financial flexibility. The holiday shopping season is a time that demands precise planning and execution. Financial institutions can maximize their impact during this critical period by starting early, leveraging advanced analytics, and maintaining a strong focus on fraud prevention. And remember, success in the holiday season extends beyond December. Building strong relationships and managing risk ensures a smooth transition into the new year, setting the stage for continued growth. Ready to optimize your strategy? Contact us for tailored recommendations during the holiday season and beyond. Download the Holiday Shopping Season Playbook

Published: November 22, 2024 by Stefani Wendel

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