In the long days of summer, the automotive retail industry feels a little sleepy. A lot of dealers, and most Canadians, take a little downtime, hang out at the cottage, or take summer road trips.
But even though it might seem slow, July and August are still decent months for automotive sales. Those months ranked fifth and sixth best for new car sales last year, and fared even better in previous years.
In doing a bit of homework about when consumers buy cars, I came across dozens of articles and websites that offer consumers all sorts of advice on the best times to purchase a vehicle. The fact that there are “industry” experts who chart this stuff is problematic. “Car Dealer Secrets Revealed: The Best Time To Buy A New Car” was a headline from Reader’s Digest.
Not only do these experts offer consumer tips on the best months, some even break it down statistically by which day of the week. Apparently, if you buy a car on a Monday, you stand to pay less than if you buy on the weekend, or even a Tuesday.
TrueCar.com even provides a guide broken down by every single day of the year, and they determined New Year’s Day is the best day to buy a new car, followed closely by Dec. 31st. They say they based these findings on 12 million transactions going back over five years.
I won’t quibble with their data, nor their decision to publish this type of information to help arm consumers with the information they might need to get better prices on a large ticket item like a new vehicle.
Price volatility that is based on factors other than market conditions and supply and demand is not something consumers readily understand, nor should they.
There are a host of industry forces that create these fluctuations in price: manufacturer incentives, the need to clear out old models at year-end, stair-step incentive programs, and the commision and bonus structures in place for salespeople. Changing all of that overnight won’t be easy, but it just might be time to tackle it.
Price volatility that is based on factors other than market conditions and supply and demand is not something consumers readily understand, nor should they. If their car dealer is near month-end and chasing a stair-step incentive bonus, they could get treated much differently than if they arrive mid-month and their sale isn’t deemed “as important.”
Most manufacturers like stair-step programs, or sales incentive programs, because they feel it motivates dealerships to do more to move more vehicles, which is good for them. But OEMs are also talking out of both sides of their mouths; they are also putting pressure on dealerships to improve the customer experience, modernize their sales processes, and be more transparent with customers.
And yet, do OEMs really want full transparency? Do they want this conversation to happen at a salesperson’s desk: “Look, the only reason I can offer you this really low price, this time, is because my manufacturer has me over a barrel. I’m only a few vehicles short of my monthly quota, and if you buy this car at this great price, I’ll be paid a bonus on all the other cars I sold this month. But please don’t tell anyone else — they won’t get this deal. Also, it’s a one-time offer.”
The car-buying public just want a fair price, and to be treated fairly and respectfully.
Engaging with today’s buyers as potential long-term customers, as most dealers do now in Canada, will lead to better and more profitable outcomes.
