We’ve all heard the commercials that say, “There’s never been a better time to buy than right now!”
For years, it’s been a mainstay in prudent marketing. Create urgency, touch emotions—these eleven words have been the closing line to more sales in the automotive industry than any other.
With an economic crisis looming over a failing industry, these eleven words, for once, might be the absolute truth.
My mother is the most prudent buyer I have ever met. She never met a price that she didn’t compare. Her understanding of the ebb and flow of sales and specials in various industries is unmatched—to her, it’s an art.
With that in mind, I heard the most shocking words from her today: “I need a new car, but I’m holding out until the economy is better.”
I knew it wasn’t credit—she pays cash for just about everything other than her house. Why did she not see that now is the perfect time to buy a new car? Dealers are dying. Traffic is at an all time low and many dealerships are closing their doors and heading to the furniture business. Manufacturers are doing anything they can to entice buyers. Bailout or not, they are hurting, and it isn’t just the domestic brands.
We’re in the scariest financial era in most of our lifetimes. It seems that almost every business, every service, and every product line is feeling the pain of an economy that is on a bubble that can burst at any moment. In the automotive industry, it cannot get any worse. The prices won’t get any lower because the desperation is at its peak.
Buy. Buy now.
As with most markets, the automotive industry is cyclical. Reuters recently estimated that 20 percent or more of current franchise car dealers will not be in business by the end of 2009 (that report was in October—the outlook is even worse now). Once the “weak” are gone, volumes will increase at the dealers who have survived. The desperation will not be as strong as it is right now because competition levels will be reduced.
The entire world is in an economic crisis. It’s hard to imagine spending more money on anything, but consider this. A vehicle is an investment. While it’s an investment of decreasing value, its necessity in most areas cannot be easily overcome. Unless you intend on keeping your current vehicle for another two years, you should consider the market, see what’s out there, and see how good of a deal you can get.
