In the car industry we can be mystified when we see good finance applications are rejected. People just move on to the next deal and don’t give it much thought while they could make the deal work . 

If a finance manager can understand why certain deals get rejected at first, it can help dealers find some hidden opportunities for rejected applications.

Automatic rejections from a lender are often accepted as: “Consumer does not fit the lender criteria.”, without more information. Sending the application from one lender to another until the finance manager closes the file, only hurts the applicant’s credit.

Lenders see a different credit bureau than the finance managers and have their own internal scoring system. A finance manager will rarely know the actual internal score of a customer with that lender.

Lenders might decline a file that is not structured based on that lender’s specific criteria. The decision made by the lender is 90 percent based on the data that the finance manager puts in their system. It is very important for dealers to have a deep understanding of credit in order to figure out if their clients will be declined or approved prior to submitting. 

Dealers have to be aware that when you send a finance application, approximately 2 out of every 3 deals are decided automatically regardless of an approval or decline. These transactions may never be seen by a person. 

For example, there was an applicant who applied for a car loan while under bankruptcy. On the credit bureau you could see a vehicle repossession happened nine months after the bankruptcy, but in fact it was included in the bankruptcy. The lender’s system was  triggered to decline the application, however it was only bad timing and not another issue on the credit file.

Ontario Underwriters are confident that we can provide your customers the best finance option for their situation. Our licensed financial agents will consider each lender’s financing requirements when working on each deal. We know how to navigate your finance deals and help you to make the most out of each deal. 

A Hyundai car dealership is shown in Bowmanville, Ont., on Jan. 22, 2022. Around the world, automakers are still struggling with a global chip shortage that has hobbled the industry for much of the past year. Doug Ives/The Canadian Press

Canadians hoping to buy a new or used vehicle in 2022 are in for the same kind of rough ride that 2021 turned out to be.

Continuing supply chain snarls and pent-up buyer demand mean consumers should brace for shortages, staggering price tags and months-long wait times for new orders, industry experts said.

In the new car market, buyers will likely find a dearth of both vehicles and financial incentives on the dealership floor, said David Adams, president of Global Automakers of Canada.

The chances consumers will walk onto a dealer’s lot and find what they’re looking for are slim. Instead, according to Mr. Adams, more and more consumers will have to place an order for the vehicle they want and wait weeks or months for it to arrive.

And with demand outstripping supply, deals will be hard to come by, he cautioned. As of January, Canadians were paying around $44,000 on average for a new vehicle, according to figures from J.D. Power.

Buying a preowned vehicle won’t spare Canadians from sticker shock either. As of mid-February, the average used-car price in Canada was $34,594, up an astonishing 47 per cent compared with the same period in 2021, according to figures provided by Canadian Black Book (CBB).

Normally, cars lose between 20 per cent and 30 per cent of their value in the first year. But with new-vehicle shortages diverting demand to the used-car market, one-year-old vehicles are now often selling for roughly the price of new ones, said Daniel Ross, senior automotive analyst at CBB. He expects that trend to continue into the spring and summer.

Frustrated consumers can blame a lasting mismatch between supply and demand for their woes, according to Shawn DuBravac, chief economist at IPC, an electronics manufacturing trade association.

Around the world, automakers are still struggling with a global chip shortage that has hobbled the industry for much of the past year. Semi-conductors, an essential component of electronic devices, are also a mandatory input for a number of new vehicles’ features, from infotainment modules to fuel management systems to backup cameras.

The shortage traces its origins to the onset of the pandemic in the spring of 2020, when automakers around the world abruptly cut down production – and their semi-conductors orders – in response to what turned out to be a sharp but short-lived drop in demand for new vehicles.

When car sales bounced back and vehicle manufacturers rushed to increase orders from parts suppliers, they found they’d slipped to the back of the line for chip producers, which were also facing soaring demand for products such as laptops and servers from households and businesses adapting to remote work and schooling, Mr. DuBravac said.

While chip makers are producing at full throttle and new manufacturing capacity is coming online, persistently strong global demand for durable goods, many of which require semi-conductors, means the industry will likely take until late 2022 or early 2023 to catch up with the backlog, he said.

And chips are just one of the supply chain bottlenecks facing auto manufacturers, with the cross-border trade delays linked to Canada’s trucker convoy protests adding another disruption to an already strained logistics network.

Rising interest rates, which would make it more expensive for Canadians to finance their auto purchases, are unlikely to have much of a dampening effect on demand this year, Mr. Adams said. That’s because many consumers will be able to trade in their used vehicle for unusually high values, softening the financial impact of higher borrowing costs, he said.

For car buyers with a limited budget, the only options may be shopping for less popular models, such as large sedans, or older vehicles, according to Mr. Ross.

By Erica Alini, The Global and Mail

Even though the Emergencies Act invoked by Canadian Prime Minister Justin Trudeau halted the various border protests by truckers, some people in the Canadian automotive industry believe it will impact the relationship between Canada and the U.S. as trade partners.

David Adams, President of the Global Automakers of Canada, said beyond just the initial financial losses the Canadian automotive industry suffered, due to the inability of goods to cross the U.S.-Canadian borders, there is also the damage it may have caused in the business partnership between the two countries.

“The whole premise of investing in Canada is you have access to the United States, which is the largest market,” said Adams in an interview with Canadian auto dealer, adding the border impasse “probably caused significant damage internationally” for Canada. 

Moreover, he wondered if the protests were part of a concerted effort to make it look like Canada is an untrustworthy trading partner.

In an interview with the Globe and Mail, Automotive Parts Manufacturers’ Association President Flavio Volpe said the border disruptions have “caused potentially irreparable harm to Canada’s reputation as a reliable trading partner.”

The protests happened at a time when Canada was actively trying to stop the U.S. from passing controversial legislation by U.S. President Joe Biden that would provide financial incentives to build electric vehicles in America—something that could cripple the Canadian auto industry. 

Though the bill failed to pass by one vote in December, the Canadian auto sector is concerned it could pass if it is tweaked.

Jeanine Lassaline-Berglund, President of Automate Canada and the Canadian Association of Mold Makers, said regardless of why the protests happened, it is one of the many things that has been piled on the manufacturing community to deal with as a result of on-going legislation to control the pandemic. 

“When (the governments) call manufacturing an essential sector, it’s difficult to see our way through that without interruption,” said Lassaline-Berglund.

She said the protests and the fallout made it difficult on a manufacturing sector that is already feeling the impact of strained relations with their U.S. partners, customers and suppliers.

“We’re going to need to do some significant work through the manufacturing community with our government partners in building back relations with the U.S. if we want to get out of the mess we’re in,” she said.

The decision by Trudeau to step up the government’s reaction happened after various U.S. politicians publicly spoke about the need for Canada to end the dispute. Among those who voiced their opinion was Transportation Secretary Pete Buttigieg and Homeland Security adviser Liz Sherwood Randall. 

Michigan Democrat Debbie Dingell told CBC News the impasse is going to have an impact on relying on Canada for imports. “I’m going to be very blunt. It does,” she said. “We cannot let ourselves be held hostage to these kinds of situations. If this is going to become a new and regular situation, we’ve got to bring our supply chain back home. We can’t count on this bilateral relationship we have.”

Adams was critical of the length of time it took Trudeau to put legislation in place to end the protests. “The time to do this was probably a week or two ago, not three weeks into the dispute,” he said. “I think it seemed pretty clear after the first week that nobody was going to be doing anything any time soon. But if (the Emergencies Act) gets the protests sorted out, that’s a good step to take.”

 

 

 

Source:

dealer, C. auto, Lefko, P., Ockedahl, C., dealer, C. auto, Moskowitz, B., & Phillips, T. (2022, February 16). Auto leaders concerned protests damaged relationship with U.S. Canadian Auto Dealer. Retrieved February 16, 2022, from https://canadianautodealer.ca/2022/02/auto-leaders-concerned-protest-damaged-relationship-with-the-u-s/

More than half of the car buyers apply for a car loan or lease when they’re at the dealership. Here’s some useful information when they ask about rates. 

Most people know that their credit score affects their approval. There are many more variables involved than only the applicant’s credit score. Here are the most important factors when applying for a car loan:

 

Credit history 

There are two components that matter to the lenders: 

1. History of borrowing money and paying it back on time. No credit leaves the lenders guessing about what the future behavior will be. Lenders want to charge a higher rate people with little or no credit because they will have difficulty predicting their behavior. For example, someone can have a high credit score but don’t have long enough history to put them in a lower risk category for the lenders. 
2. Affordability: If the applicant can afford the payments based on their current debts, income, etc. If the applicant has a lot of debt and expenses, they will be seen as a riskier borrower, which results in a higher interest rate.

Overall, credit score is only a number. Score is only a screening factor. A high score means that a person has not made any mistakes with their credit but lenders don’t just look at your credit score and decide “approved” or “denied”. Our credit department will look at your credit, help you to get the best approval, and establish your credit for the future.

Debt-to-Income Ratio

Your debt-to-income ratio is all your monthly debt payments divided by your gross monthly income. This number is one way lenders measure your ability to manage the monthly payments to repay the money you plan to borrow. Lenders like to look at this ratio because it’s a good indication of how likely you are to pay off your new loan.

It’s also important to note that having debt can be better than having no debt, as lenders will be hesitant to lend to someone who cannot show any history of repayment.

 Vehicle Status

The car itself is considered as a collateral to secure the loan. Usually, older cars are less valuable to the banks. If the customer does not make their payments, the lenders will consider that as a riskier asset and charge a higher rate. Also, an older car will tend to become more expensive to maintain. Someone who’s already struggling to make their payments is more likely to default if the car requires repairs. When the banks do the analysis to calculate the interest rate, that’s a variable which contributes to their decision. Newer cars encourage lenders to offer lower rates.

Car Loan Terms 

Age and odometer are important factors that can affect the terms of the loan, such as interest rate, down payment, and amortization.

For example, the same person can be approved for a longer term and lower rate for a newer car, but might get a higher interest rate and shorter terms for another car. You can always reach out to us and discuss your customer’s options. 

Down Payment 

Down payment is equity towards the loan that offsets the bank’s risk. The down payment is a percentage of the purchase price of the car, that is paid upfront. Our underwriters will do their best to meet your customers expectations and get them the best approval based on their financial situation. 

Employment Stability

Lenders might ask for proof of employment, such as pay stubs, bank statements etc. Lenders will feel more confident in the applicant’s ability to pay back the loan. We are able to provide loans for many types of employment or in some cases non-employed . You can contact our licensed agents to discuss options.

The Economy

The economy is a big factor for lenders in determining interest rates. In times of economic distress, such as Canada’s 2008 recession, or this year’s COVID-19 pandemic, lenders change their programs according to the market and the risk exists. 

 

Ontario underwriters will be happy to answer all your questions about car loans and do a free, no obligation pre-approval for you. Which is a powerful time-saver.

 

Joe Tarin of Corsa Auto Repair and Sales surveys his downtown Toronto lot with a stoic smile. 
 
To pedestrians shuffling by, the used car dealership likely appears plenty full, with coupes and sedans parked bumper to bumper. But in fact, Tarin says his inventory is down as much as 35 per cent compared to pre-pandemic levels.

“After the pandemic, it’s extremely hard [to find used vehicles] and the prices have gone up extremely,” he noted. “So when we’re retailing it, the price is obviously going to be a bit higher.”

With inflation in Canada rising at the fastest pace in 18 years in October, virtually everything consumers buy has become more expensive. But amid a crippling microchip shortage and corresponding reduction in new car production, price hikes in the used vehicle market have been very severe. 
 
According to AutoTrader.ca, the country’s largest online marketplace for pre-owned cars, the average list price of a used vehicle surged 27 per cent year-over-year in November to $31,875. Previously, the mean price of a used car had never surpassed $30,000. Inventory, meantime, dropped 17 per cent. 

“One of the things that’s always been true about cars is that you buy a car and it’s worth less as soon as it leaves the lot,” said Flavio Volpe, president of the Automotive Parts Manufacturers Association. “This past year, the average value of used cars has gone up. It’s never happened before. It defies all economic modelling.”

Volpe said new car production was the “first domino” to fall during the pandemic. Without the semiconductors necessary to complete their vehicles, automakers were forced to slash output and park their unfinished inventory in sprawling lots. The issue then spread to auto parts suppliers, rental service companies and used car dealers, which rely on a steady flow of new cars and trucks. 

“Dealership groups usually have about 60, 70 days of inventory on hand,” Volpe noted. “They’re down to a week or two weeks in some cases. It’s really unprecedented.”

 

NEW GUARD, OLD GUARD

Experts also note the impact of the supply chain crunch on used car dealers has been uneven. Whereas more traditional retailers saw their inventory dwindle as the microchip shortage took hold, online used-vehicle sellers have managed to buck the trend. 

Clutch Canada Inc., for example, saw its inventory balloon over the course of the pandemic. 

The online buyer and seller of used cars had just 89 vehicles in its inventory at the end of the first quarter of 2020. Today, they boast 1,250 used cars and trucks.

“We’re a technology company at heart,” said Dan Park, chief executive officer of Clutch. “So our secret sauce is the software engineers, the data scientists and the analysts that we have that buy inventory every day.”

Park said that unlike traditional used car dealers, which rely heavily on trade-ins to replenish their stock, his team taps auctions, wholesales and private sales.

Still, Park noted it has become harder to source used vehicles, particularly given rental services’ depleted fleets. And as a result, prices for Clutch and its buyers have climbed.

On average, he said prices for vehicles selling on the online platform are up 16 per cent compared to the start of the pandemic. 

 

PRICE PRESSURE WON’T LET UP SOON

Experts say it will likely take at least two more quarters before car production returns to pre-pandemic levels and the auto ecosystem normalizes. But even then, there may be ongoing price pain for consumers. 

 According to Ian MacDonald, the chief marketing officer at AutoTrader.ca, carmakers may be learning the value of production discipline, and re-evaluate their inventory models.

“Maybe [automakers] will have less of an appetite to build up that inventory,” he said. “Because when demand is constant or even high… and the supply is constrained, many [carmakers] have realized that they don’t need to be quite as generous with incentives and things like that. There’s a higher margin for them.”

 

 

 

Ellis, P. (2021, December 6). Chip shortage, supply chain issues give used car prices rare boost – BNN Bloomberg. BNN. Retrieved December 7, 2021, from https://www.bnnbloomberg.ca/chip-shortage-supply-chain-issues-give-used-car-prices-rare-boost-1.1691701.

Any Score Accepted

Financing on the Vehicle of Your Choice, Bad Credit, No Credit!

Car Loan With No Money Down Up To $50K With Any Credit. Low Affordable Payments. Fast, Easy,  & 100% Secure!!! 

In the car industry we see these quotes everywhere. What extent can you trust these promises?

How long did it take you to realize misinformation from the finance company you’re working with can harm your business? When customers are presented with misinformation at the start of the process, it will be harder to close them at the end. You don’t want to make promises that you can’t keep.

 

• Are low interest rates available? Yes!
• Will it be available for anyone or on any car? No! 
• Can a customer be approved with 0 down payment? Yes!
• Will every customer qualify with 0 down payment? No!
• Can a customer be qualified without providing their SIN number? Yes!
• Can every customer on any car be approved without providing their SIN number? No!

 

In the finance world, one person can be qualified with a lower rate on one car, or the same person might be qualified for a higher rate on a different car. The same customer might even be declined for a different car! 

 Financing is a very scenario-based product. There are more variables involved than just a credit score. While we access the lowest prime rates for used cars, it is important to be aware that those rates will not be available for any car or any customer.

Just like selling cars requires your knowledge and experience, finance is our profession. Our services are not limited to only taking applications from you. We are looking forward to your growth. We’d like to do business with professional dealerships who may need more financing resources or need a virtual finance office to take care of some part of the job. We don’t sell cars and we only focus on getting the best terms for your customers. 

We are confident that we can provide your customers the best finance option for their situation. After the application is submitted we’ll get back to you and your customers in 1 to 2 hours and we take care of the whole financing process. We are mobile and provide our financial services throughout southern Ontario.

Let us professionally take care of your financing and work together to create the best sales experience for your customers.

 

Wholesale Prices, Week Ending October 22nd

 

 

The Canadian used wholesale market continues to be red-hot, as prices increase for the 11th straight week. 21 of 22 vehicle segments saw prices rise for the week, as lack of inventory continues to drive wholesale prices higher. Overall, prices increased +0.60% for the week, with Car segments up +0.69% and Truck/SUV segments up +0.51%. The Near Luxury Car segment had the largest price increase (+1.80%) for the week, followed by Sub-Compact Luxury Crossover (+1.37%).

	This Week	Last Week	2017-2019 Average (Same Week)
Car segments	+0.69%	+0.68%	-0.44%
Truck & SUV segments	+0.51%	+0.59%	-0.30%
Market	+0.60%	+0.64%	-0.37%

 

 

 

 

 Car Segments

 

 

• Overall, volume-weighted wholesale used car prices increased +0.69% for the week, continuing the positive trend for the 11th straight week.
• 8 of 9 car segments had prices increase – with only Prestige Luxury Car seeing prices decline for the week, down -0.16% from last week.
• The Near Luxury Car segment had the largest price increase for the week (+1.80%) followed by the Compact Car (+1.16%), and Sporty Car (+1.01%).

 

 

 

 

Truck Segments

 

 

• For the 8th consecutive week, all 13 Truck/SUV segments saw prices increase. Collectively, the Truck/SUV segments were up +0.51% for the week.
• The Sub-Compact Luxury Crossover segment had the largest price increase for Truck/SUV segments at +1.37%, followed by Sub-Compact Crossovers (+0.97%) and Compact Crossover/SUVs (+0.90%).
• Compact Luxury Crossovers/SUVs (+0.13%) had the smallest increase for the week.

 

 

 

 

Used Retail Prices & Listing Volumes

 

 

The average listing price for used vehicles continues to hit historic highs week-over-week, as the 14-day moving average now sits above $29,700. Analysis is based on approximately 120,000 vehicles listed for sale on Canadian dealer lots.

 

 

The number of used active listings continues to fall and now sits below 112,000 — the lowest point in the last 3 years. The 14-day moving average has now sits at ~111,800 units. Days-to-turn remains stable at ~48 days (unchanged from last week).

 

 

 

 

 

 

Volume

 

 

Used Retail

 

 

The CBB Listing Volume Index for used vehicles remained flat for the week. Currently the index sits at 0.87; dealers continue to deal with depleting inventory levels on both New and Used vehicles. Over the past 18 weeks, the used vehicle listing volume has seen significant declines.

 

 

 

 

Wholesale

 

 

The Canadian wholesale market continues to increase yet again. This past week, nearly all segments reported increasing values.
Supply remains low while demand continues to be strong on both sides of the border. Upstream channels continue to tap supply before it can be available at physical auctions.

 

 

Conversion rates remained strong this past week. Rates were observed into the 75% range on some lanes last week, with the few low kilometer, good condition units garnering high levels of bidding activity and premium pricing. In general, the quality of vehicles at auction remains somewhat below average as the supply of better-quality vehicles continues to be bought upstream.

 

 

The U.S. market exchange rate is similar compared to the previous week and remains favorable for exportation when price and demand are taken into consideration.

 

 

Canadian Black Book’s Market Insights

 

 

Economics & Government

 

 

• The Consumer Price Index rose 4.4% on a year-over-year basis in September, the fastest pace since February 2003 and up from a 4.1% gain in August.
• Year over year, consumers pay more for gasoline in September. Prices at the gas pump rose 32.8% compared to September last year.
• The Canadian dollar remains stable around the $0.81 to finish the week.

 

 

Industry News

 

 

• Toyota will spend $3.4 billion through 2030 to make automotive batteries in the U.S.
• Kia teases redesigned Sportage ahead of US debut next week.
• Polestar and Electrify America announced an agreement that will result in free fast charging over a period of two years for all Polestar 2 sold in the U.S.

 

 

U.S. Market

 

 

In the U.S., overall Car and Truck segments (+0.63%) increased for an eighth week; the prior week increased by +0.61%.

 

 

Volume-weighted Car segments increased +0.87%, compared to the prior week’s increase of +0.67%:

 

 

• All nine car segments reported gains again last week.
• Mid-Size Cars increased for a tenth week in a row with a gain of +1.29% last week, an increase from the prior week’s already large gain of +1.11%.
• Compact Cars have also now reported ten consecutive weeks of increases for an average weekly increase of +0.68%.

 

 

Volume-weighted Truck segments increased +0.52%; the previous week had an increase of +0.58%:

 

 

• All thirteen truck segments reported gains last week.
• Full-Size Van values continue to push higher, now reporting increases thirty-eight out of the last thirty-nine weeks. The average weekly increase is +0.56%.
• Compact Vans have also had consistent week-over-week increases, with gains reported in thirty-six out of the last thirty-eight weeks, for an average weekly gain of +0.65%.

 

 

 

CBB Weekly Automotive Market Update 10/26/2021. Canadian Black Book. (2021, October 26). Retrieved October 29, 2021, from https://www.canadianblackbook.com/blog/cbb-weekly-automotive-market-update-10-26-2021/.

Eighty per cent of Canadian car shoppers expect to receive their new vehicle within a month, while 20% expect to wait more than a month, according to a new national survey conducted by AutoTrader.ca. 

The survey was conducted during the ongoing global microchip shortage to better understand the importance of new vehicle delivery timeframes. That may be an issue for dealers who hope to meet consumer demands and sell more vehicles, but the situation is not without opportunity—as they can still focus on targeted marketing. 

“The survey set out to gauge just how long consumers are willing to wait for that perfect car, and if they are now more open to the influence of advertising for another automotive brand or model if the vehicle they want is out of stock or delayed,” said AutoTrader.ca in a news release. 

Key findings from the survey indicate that two out of three Canadian consumers believe the vehicle delivery timeframe and availability are either “important” or “very important.” And while they are willing to extend wait times, many consumers would consider switching manufacturer or model preferences if they find the time between vehicle purchase and delivery is too long.

AutoTrader.ca said new car buyers must wait anywhere from a few weeks to six months or more to have their vehicle delivered. Of the consumers they surveyed, 16% of respondents would consider switching to another vehicle if their first choice was not immediately available, even if the alternative option is actually their second or third choice.

Forty-two per cent are willing to wait until a later date to buy the vehicle they want if it is out of stock or its delivery is significantly postponed. However, for car shoppers that cannot immediately get their preferred vehicle, 22% would hold off on buying a new vehicle, and instead wait until the overall market has more available inventory.

“This indicates that 64% of car shoppers would rather wait at least some time for inventory to become available rather than compromise on their preferred vehicle,” said AutoTrader.ca, adding that “18% would consider buying a used model of their top car choice and get it right away versus switch models or cross shop competing manufacturers.”

How long are consumers willing to wait? According to the study, if the vehicle is not immediately available then 43% would be willing to wait less than three months, 31% would be willing to wait between four to six months, and 25% said they would wait more than six months. 

AutoTrader.ca said the situation can create opportunities for a variety of marketing efforts by dealers, “including developing ways to gauge—and potentially influence—a prospect’s shift in purchase intent while they wait for their preferred vehicle to become available or, in contrast, reinforce that decision for when the vehicle does eventually become available.”

The company said more than 52 percent of “brand loyalists” who would be willing to hold on for their preferred vehicle would still be open to changing brands or models while they wait. And 24% said they may be open to advertising and options from an alternative automaker. 

“This 24 percent could even be an under-representation given consumers typically underestimate the influence (of) advertising overall,” said AutoTrader.ca.

The update, they said, is that dealers should feel confident that “a strong, proactive marketing and communications plan” that addresses vehicle delivery challenges, in addition to offering top-notch customer service, can be a winning strategy.

They advise focusing on the following elements:

• Maintaining advertising efforts. “Keep your ad dollars working for you, so you can act on opportunities to move prospective customers into an alternate nameplate, (particularly the case with network dealerships), into another model, or even used inventory”;
• Ramp up your customer service, with a focus on flexibility—as in, a willingness to adapt your processes to keep the customer happy and informed; and
• Create a strategic communications plan that includes the moment a purchase contract is signed up to the moment the keys are handed over.

 

canadianautodealer.ca/2021/10/theres-opportunity-for-new-car-dealers-even-with-delivery-delays/

 

The findings of a recent automotive study by a reputation experience management (RXM) company points to the importance of reviews for nearly 80% of consumers—with 41% saying they will read at least five reviews before visiting a dealership. 

In its annual automotive industry report released on October 11, Reputation also found that inventory shortages are top-of-mind for customers, with online reviews mentioning shortages increasing 32.6 times from January 2021 to July 2021.

“The automotive industry has seen it all over the past year, from huge spikes in sales to inventory challenges,” said Joe Fuca, CEO of Reputation. “Through it all, dealers and manufacturers have embraced digital tools and customer feedback to create a smooth car buying experience for all.”

The company said reviews and star ratings drive customer leads—with 64% of consumer respondents saying they would travel more than 20 miles (about 32 kilometres) to a top-rated dealership.

As for what is helping dealership ratings, Reputation said customer service is the main driver of positive ratings. And that despite the increase in digital activity, purchasing a vehicle remains a largely “human-centred, face-to-face experience”—with 65% of consumers indicating that they are influenced “significantly” by in-person visits. That said, online remains the preferred choice during COVID.

The report also found a significant increase in electric vehicle (EV) reviews since 2020, and notes that the uptick can be tied to an increase in EV sales and heightened public interest.

What is not helping dealerships is the sticker price challenge. If customer service is the main driver for positive ratings, price is the opposite—the main driver for negative dealership ratings. 

“Dealerships need to manage consumers’ expectations about prices during the inventory shortage when demand is outstripping supply,” said the company in a news release. “Eighty-two per cent of consumers we surveyed with YouGov said price is an important consideration, more than any other factor.”

Reviews mentioning shortages are also around twice as likely to be negative compared to reviews about the industry in general, which can impact a dealership’s online standing.

“So, it’s not that customers are necessarily upset about a chip shortage but how dealerships are communicating with them about the ramifications of the shortage,” Reputation writes in its report. “That includes the impact on the vehicle’s price and elimination of rebates or other incentives.”

 

 

 

 

 

Reviews are key for consumers, inventory shortage top-of-mind. Canadian auto dealer. (2021, October 13). Retrieved October 15, 2021, from https://canadianautodealer.ca/2021/10/reviews-are-key-for-consumers-inventory-shortage-top-of-mind/.