Customers are increasingly skeptical when making purchases – with a constant bombardment of advertisements online, on television and on social media, long gone are the days of choosing from three vacuum cleaners at the local big box store.
Today, consumers have a wide variety of purchasing options and a myriad of products to choose from for any given purchase. With so many choices, it’s easy to be selective and find products that best fit customers’ budgets and lifestyles. This also means customers do more research during the purchasing process. The same is true when customers purchase vehicles. However, customers can be choosy with more than just the make the model – they can also shop around for lenders.
Affordability remains a major concern for consumers, who are facing high vehicle prices and high interest rates. The average MSRP of vehicles in retail advertised inventory reached $51,384 in July 2024, marking a notable increase from $49,654 in July 2022. Customers are hesitant to purchase and are keeping their vehicles longer – as of May 2024, vehicles were 12.6 years old on average, up two months from 2023.
With unfavorable prices and interest rates, cautious buyers are inclined to explore multiple options in terms of vehicles and lenders to find deals that best fit their needs. While this environment increases competition among lenders, it also offers opportunities for lenders to set themselves apart from the competition.
Additionally, in our digital age, customers expect convenience and transparency. Lenders that can cater to these expectations through user-friendly platforms, technology that fits buyers’ needs and consistent pricing information from online browsing to closing the deal will increase customer loyalty and their business. The data that drives this information is also beneficial to lenders, who can use it to analyze their market position and respond to their competitors’ strategies.
Click here to read about three strategies lenders can use to stand out from the competition and win business in a competitive market:
- Offer a wide range of services through lending platforms to build customer loyalty.
- Work closely with dealerships so they can recommend your services to their customers.
- Monitor other lenders’ strategies to gauge your own.
