IRVINE, Calif. — The length of vehicle ownership has continued to increase, hitting an all-time high average of 67.9 months — nearly 78 months for new vehicles and 63 months for used vehicles. But a survey conducted by AutoAlert found that dealers could sell more cars if they properly leveraged their customer data.
According to the company’s survey of 400 consumers, 75% of respondents would be very likely or somewhat likely to trade-in their vehicle today if their monthly payment would remain about the same. And 49% of them were not aware they were able to upgrade their current vehicle before their loan or lease is at end-of-term.
“How long a consumer holds on to their vehicle has a direct impact on the SAAR and is a key performance indicator of the overall health of the auto industry,” said AutoAlert CEO Brian Skutta. “To put this in context, the lengthening ownership lifecycle is resulting in consumers buying fewer vehicles over their lifetime, giving dealers fewer opportunities to sell them cars — if you wait for them to come to you.”
AutoAlert found that regardless of how long consumers have owned their current vehicle, 63% of them would like to upgrade their vehicles every three years or less. The three most motivating factors for those customers to purchase a new car were better fuel efficiency (83%), a current vehicle that requires too many repairs (68%) and additional safety features (65%).
And dealerships that reached out to customers were better off. In fact, 57% of customers were very likely or somewhat likely to purchase a new car from the dealership where they service their car. And 69% of them felt it was very important or somewhat important for the place they bought their vehicle to proactively notify them when they are in a position to upgrade their vehicle if it doesn’t impact their monthly car payment. More than half of consumers want to be notified about key points in their ownership lifecycle (e.g. warranty is expiring, trade-in value is about to decrease rapidly, before incurring mileage overages on lease, end of contract).
“Dealerships find better stewardship of their customer records through data mining, empowering them to disrupt longer trade cycles down to an average of 36 months — a dramatic increase in trade-cycle velocity," Skutta said. "This type of data-driven engagement with consumers is where dealerships are finding a great return on investment.”