Auto sales are threatened by rising interest rates and higher prices. Although the industry is still profitable thanks to a strong U.S. economy, October sales are lower than the same time last year, according to a recent Edmunds report. The interest rate for new vehicles is the highest seen in a decade.
Now, more than ever, it’s important for those in the industry to put their best foot forward over the competition, according to marketing experts at Printelf, a leading supplier of business cards for the automotive industry. “There can be no doubt that qualified automotive repair people are highly trained individuals who are performing a critical function in the automotive industry,” according to a recent blog on their site.
Interest Rates Are Causing an Uptick in Prices
Rising interest rates are taking up more of the monthly payment. Luckily, increasing wages help some buyers meet the higher payments. According to U.S. News and World Report, using data from Edmunds and Cox Automotive, sales projections for vehicles in the U.S. are down by up to 2.1 percent.
Nissan, Honda and Ford had sales decreases of 10.6, 4.1 and 3.9 percent, respectively. On the other hand, some carmakers reported increases. Kia posted 1.6 percent better performance over last year and Toyota sales ticked up by 1.4 percent. Volkswagen, Subaru and Fiat Chrysler boasted 2 to 15 percent increases despite the challenging interest rates.
Despite evidence of positive news, U.S. car shoppers are steering clear of new vehicles. In October, the interest rates on new cars averaged 6.2 percent, a 1.3 percent increase since last year. This represents the highest rates seen in nine years, according to the Edmunds report.
The Decline in Zero Rate Loans
Less than 4 percent of car buyers received a 0 percent interest loan, a downturn compared to 7.5 percent last October. The Federal Reserve started raising interest rates to cool down the economy and head off inflation. However, that leaves consumers facing higher costs to borrow money.
As fewer shoppers show up on lots to purchase fancy vehicles, the competition among car dealers is likely to grow more fierce. Every edge counts, from wider appeals via radio and TV advertising to the more personalized marketing tools, including business cards and personal branding online.