3 Ways to Increase Market Share as a Non-captive Lender
The automotive retail sector has experienced significant volatility since the COVID-19 pandemic, when inventory dropped sharply due to supply constraints, logistics challenges and pandemic-related shutdowns. .
During this time, dealerships thrived as limited inventory could not meet consumer demand, which often resulted in consumers purchasing far above the manufacturer’s suggested retail price. . As inventory levels have rebounded, however, the landscape has shifted. . The average vehicle price is now higher than ever and, coupled with higher interest rates, we’re seeing a challenging sales environment. .
In these conditions, consumer hesitancy has become prevalent. . OEMs and lenders are implementing various promotions and incentives strategies to stimulate sales. . However, cautious buyers are inclined to explore multiple options to find deals that best suit their budgets and lifestyles. .
This shift in consumer behavior provides a unique opportunity for non-captive lenders to come to the forefront of automotive retail. . By offering competitive financing solutions and tailored services, non-captive lenders can effectively cater to the needs of discerning customers, thereby enhancing their market presence and driving sales in a challenging environment. .
In an environment where consumer purchasing is subdued, flexibility and transparency emerge as key strategies to win over potential buyers. . Non-captive lenders are well-positioned to deliver these attributes, offering a diverse range of leasing and purchasing options that resonate with budget-conscious customers. .
By providing unconventional term deals, rates and more appealing residual values, these lenders can differentiate themselves from captive lenders. . Additionally, non-captive lenders can enhance customer trust by presenting clear and accurate offers throughout the entire purchasing journey, from initial online browsing to finalizing the deal. . This approach not only meets the evolving needs of consumers but also fosters stronger relationships, ultimately driving sales in a competitive automotive retail landscape. .
Visibility is crucial for non-captive lenders, particularly as they lack the direct connection to inventory that OEMs possess. . Their offers are often influenced by OEM production and publicly listed incentives, which can limit their competitive edge. .
Typically, consumers prioritize captive lenders to finalize their purchases. . However, when faced with affordability challenges, customers are increasingly motivated to examine all their options before making a decision. . Awareness of competitors’ offerings enables non-captive lenders to remain competitive and provide additional options to customers who may not otherwise purchase.
Click here to read about three strategies non-captive lenders can use to overcome current automotive sales challenges and win business in a competitive market:
- Offer odd-term leasing and financing options to gain market share.
- Adopt a flexible approach to EV residual value setting.
- Look for opportunities in the market to offer deals and incentives where captive lenders are not competing.
