Analysts expect new vehicle sales to reach approximately 75 million units in the coming year. Another 40 million used vehicles will be purchased as well. Those are impressive predictions for the automotive market. Dealerships that have the inventory on hand to meet potential car buyers’ expectations stand to bring in quite a bit of profit as a result of those pending sales.
Looking at Another Side of the Story
Some may be surprised to learn that the automotive sector forecasts only cover a fraction of the possibilities. In fact, research indicates that almost 10 percent of Americans don’t own a vehicle at this point. Of those, more than 70 percent are looking to purchase a vehicle in the coming months. That could amount to well over 20 million in additional vehicle sales. Those sales could greatly increase dealerships’ profits.
Exploring the Concept of Lost Sales
How do potential vehicle sales factor into dealerships’ bottom lines? In truth, they don’t. They could, though. Those possible sales could easily boost businesses’ profits, but many of them may not even happen. As a result, dealerships won’t benefit from them, and consumers who are in the market for new or used vehicles won’t be able to get the cars, trucks, and SUVs they need to make their lives more convenient.
Digging Deeper into the Matter
Why wouldn’t those sales happen? If so, many people want to purchase vehicles, why wouldn’t they just take the plunge? These are fairly complicated questions with multifaceted answers. In some instances, it’s a matter of inventory. Many dealerships are experiencing inventory problems these days. Because of a worldwide microchip shortage, manufacturers are struggling to meet their quotas. In turn, dealerships aren’t getting the new vehicles they need to meet consumers’ demands.
That leads to yet another problem. Since dealerships can’t get the new vehicles, they require to build their inventories, prospects are holding onto the automobiles they already own. That’s bringing about a shortage of used vehicles for sale to meet the needs of that portion of the market. As a result, those who are looking to purchase used vehicles may see shortages as well.
On the other hand, many potential car buyers simply can’t get the loans they need to purchase vehicles. Some haven’t yet established their credit whereas others have credit issues on their records. Certain prospects don’t have enough income to qualify for conventional auto loans. In all those cases, a lack of borrowing power is holding back would-be buyers. Companies like Consumer Portfolio Services can help solve those issues by providing auto loans to consumers who otherwise wouldn’t qualify.
Making Sales Happen
With millions of potential vehicle sales online, dealerships across the country are looking for ways to pair prospects with the vehicles they need. Pre-orders are on the rise, helping dealers to sell new vehicles before they even become available. That’s expected to eventually help bridge the gap in supply and demand for used vehicles. Additionally, bringing more loan options to would-be buyers can further increase sales for dealerships. It’ll also make vehicles available to more people who wouldn’t qualify for traditional loans.