Although the new-car market is beginning to stabilize, it’s no secret that, since the pandemic, new-car prices have skyrocketed. Continuing to rise until meeting their peak in 2023, the jumps in prices have made for a volatile market. Owners have been holding on to their vehicles longer or showing more interest in used options if they need a new one. And dealers are having a difficult time moving vehicles from their lots, leaving them to struggle with diminishing sales opportunities and excess inventory for months on end.
High Car Prices are the New Normal
Based on the 2024 Affinitiv Consumer Survey, in 2023, the sticker shock of new vehicles left 31% of new-car buyers feeling like they overpaid for their vehicle. But despite record-high vehicle prices holding steady, only 17% of buyers feel they overpaid for their vehicle in 2024. A key reason? High prices are the new normal. Not just for new vehicles, but for all goods and services. Another reason? With the overstocking of new vehicles, great deals are more plentiful than they’ve been in the past. In addition to dealers slashing prices on vehicles across their inventory, manufacturers are boosting their incentives: according to Kelly Blue Book, manufacturer incentives increased to $3,897 around December 2024, their highest level all year, as inventory topped 3.15 million cars for the first time since the pandemic.
The eagerness of manufacturers and dealers to move inventory and avoid excess supply, combined with the Federal Reserve dropping the interest rate for a third time in 2024, gives consumers a great opportunity to get the new vehicle they’ve been wanting for an incredible deal. And since quality used vehicles are still a hot commodity that are difficult to find, trade-in values are consistently higher as well. Many buyers feel like buying a new car is smarter than buying a used one—and if they can get a good value for their current vehicle, they’ll be more likely to make the upgrade to a new one now.
Change Your Approach to Create More Sales Opportunities
The change in buyer perception around whether they overpaid for their vehicle presents dealerships with an advantage: after stacking discounts and incentives, more shoppers may finally be open to buying new. But to give them the extra nudge, or start a conversation with those who hadn’t even considered purchasing a new vehicle recently, a customer-centric equity offering and car trade-in process is essential.
With the right strategy and personalized offers, dealers can easily show customers how much value their vehicle holds, then show them how they can use that value to get into a new vehicle. And by establishing a consistent process across both sales and service, your dealership can drive vehicle trade-ins and sales opportunities seamlessly.
Offset Sticker Shock with Strategic Equity Offers
More shoppers are finally showing interest in purchasing a new vehicle, due to better discounts, higher incentives, and lower interest rates. And for those who do take a new car home, they’re feeling much less like they overpaid compared to a year ago. This gives dealers an opportunity to increase business and make way for more inventory throughout 2025.
To spot—and convert—more of those opportunities, an advanced equity mining and vehicle trade-in tool like Affinitiv Quote can make it simple. Powered by data and AI, Quote ledgers give a smart, accurate view of those most likely to upgrade to help your team make connections with the right leads at the right time. And the precise equity offers show consumers exactly what they could get with their current vehicle, showcasing dealership discounts and manufacturer incentives to help counteract high new-vehicle prices overall. They even have the flexibility to change the offer so they can explore more vehicles and prices.
To learn more about Affinitiv Quote and how it can drive $315 more profit per deal via AI-based equity offers, reach out to our team today.
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