Feb 11, 2013 Philip Burgess
The automotive industry in the United States was among the hardest hit by the Great Recession, as consumer spending dipped lower than seen in decades. However, there has been a recent resurgence in new and used car sales, likely the result of a variety of improvements across several segments of the national economy, including employment and home valuations.
As a result of the recession, when traditional lending avenues were squeezed substantially, alternative financial services became much more common, especially in the automotive industry. A confluence of factors is helping the sector regain its financial footing and making it more possible to lend the money consumers need to purchase new and used automobiles.
The Daily Mail recently reported that used car dealerships in West Virginia are beginning to see much higher call for a variety of automobiles. This increased demand is partly the product of the increasing average age of cars currently in possession by consumers across the nation, which most experts believe is more than 10 years.
This factor improved the prospects for used car dealerships, as consumers are beginning to be able to sell back their cars at much higher values when they are in good condition. According to the news provider, experts in the industry believe that there is currently a shortage of quality used cars in West Virginia, making it a seller's market for all involved.
The improving economy has helped drive up car valuations in recent years, while more advanced manufacturing is also leading to better resale values.
"You have no idea what your used car is worth today," John Knight, general manager of a South Charleston dealership, told the Charleston Daily Mail. "As we came into 2012, it was starting to get difficult to get good quality used cars. It's become more and more important for us to be very aggressive when a customer is here looking at a new car, to get that trade-in."
Capitalizing on the trend
Providers of alternative financial services are in a good position to increase revenues in the coming years, as more consumers continue to prefer these options compared with traditional banking services. Further, the new tactics of used car dealerships, including financing sales in-house, is gaining more notoriety and preference from consumers.
Cultivating a strong strategy to get customers the financing they need to purchase cars will help improve profits in the coming years, as consumer spending is expected to continue increasing.