The holidays are nearly upon us, and everyone is gearing up to make their final purchases before the end of the year. In fact, during this heavy shopping season, retail sales are expected to hit a new high of $960 billion. While shoppers look for the perfect gift, let’s cover recent developments and predictions that might convince them to put something bigger under the tree this year: a new car.
Decreasing Interest Rates
For the first time in four years, the Federal Reserve announced a 0.5% cut in benchmark interest rates at its September meeting. While it could take a few weeks for auto loans to see the effects of the decrease, it’s a positive sign for buyers looking for loans in the next few months.
Additionally, the Federal Reserve announce a 0.25% rate cut during its November meeting, and many experts believe additional cuts could entice more car buyers to purchase at the beginning of 2025.
Increased Sales and Spending From Incentives
In October 2024, car buyers spent $5.1 billion more than in October 2023, and vehicle sales rose 1.7% compared to the previous month. This jump in spending and sales will likely continue during the holiday season as manufacturer incentives increase.
Manufacturer incentives have always played a big role in car buying during the holiday season. In October 2024, the average transaction price was $44,904, and incentives reached a discount of 7%. High incentives are expected to continue through the holiday season to encourage customers to buy a new car and help dealers clear out old inventory.
Holiday Preparation for Dealers
With decreasing interest rates and larger manufacturer incentives, you should prepare for an influx of holiday shoppers ready to claim their deals. Making your dealership festive and holiday ready is an important part of the shopping experience. Here are a few things you can do to prepare your dealership for the holiday season:
- Partner with a local charity — Whether it’s hosting a food drive, donating toys, or giving a percentage of sales to charity, partnering with a local nonprofit will incentivize customers to visit your dealership and support a good cause.
- Send holiday-themed emails and letters — The holidays are a great time of year to reach out to old customers, neighbors, and new leads with an email or direct mail campaign.
- Market new incentives — Email, direct mail, and social media are great ways to let your customers know about new incentives and entice them to visit your store.
Simplify the Season With Auto Data Direct
Auto Data Direct offers a wide range of dealer services to help streamline your everyday needs and make the holiday season less stressful.
- NMVTIS Title Check — Verify a vehicle’s current state of title, title brands, junk, salvage, and insurance total loss data.
- DMV123 — Get real-time DMV records from 40-plus states to verify owner, title, registrant, and lienholder information before accepting a trade-in.
- ELT (Electronic Lien and Title Services) — Reduce handling, storage, and mailing costs associated with paper titles.
- VTR50 — Title and register out-of-state vehicles in all 50 states.
The holidays are right around the corner, and your dealership should be getting ready for a busy shopping season. With a touch of holiday flair and the right tools, your dealership can take advantage of a record-breaking end-of-year sales season. Happy Holidays!