The used car market is hot and dealers around the country are scrambling to shift their traditional new car advertising budgets to promote used car sales. Why not? The margins can be better on used cars, plus dealers can stock their lot heavy or light depending on the demand for a specific type of vehicle or range of vehicles. Recently, dealers have been scouring the auctions buying up all the used vehicles they can. Now that their lots are stocked with plenty late model/low mile used cars, it’s time to sell them fast.
If you’re absorbing automotive media right now, you’ve noticed the shift to used car sales. Dealers are promoting vehicle buyback programs, offering to pay up to 120 percent of NADA value for trades and everything in between, to get more used car inventory and to flip buyers over to their new car inventory.
How are top dealers standing out and promoting their vehicle selection in a crowded used car market? It differs from market to market. Web banner ads, direct mail, newspaper, and select database offers seem to be the best fit right now. Electronic is still the number one overall medium for dealers, but primarily for new car advertising.
What is the best medium for dealers to use when promoting used cars and what is the best type of offer? Right now, it’s used car payments. That’s right, used car payments. This is not a new trick of the trade, but it’s a trick that’s being used more often recently to increase traffic to the dealership and catch eyeballs with their advertising.
This concept appeals to the consumer’s sense of greed: “I want more for less and I want something I know I can afford each month.” A $159 per month car payment sounds like a whole lot less than $18,000; doesn’t it? It looks better in print (web ads, newspaper, direct mail, database offer) and sounds better in electronic advertising. People understand what they can afford each month in terms of a payment, but $18,000 seems like a lot of money to borrow right now. Of course, they end up borrowing the money, but dealers are driving more traffic with eye catching low monthly payments, rather than price on used cars.
Payments have been driving the purchase decision on new cars for years supported by factory incentives and low APRs. Now with the economy the way it is, high gas prices and the mind set of a cautious and budget minded consumer, it is working on the used car buyer more than ever.
Still not sure? Here is a no cost way to test this approach at your dealership today. Just place ad banners on your website’s home page that screams ‘low monthly payments’. Have one under 250 dollars per month, one under 200 dollars per month and even another under 150 dollars per month on late model, low mileage used cars. You will receive phone calls and email inquiries immediately. From there, you will feel more comfortable placing traditional advertising using the same format and payments.
Thomas Hensey is the managing partner at Rhino Marketing, a full-service automotive advertising agency. Telephone 713-681-6711 or email [email protected] or visit www.rhinoautomotive.com for further information.
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