DEALERS MUST PROVIDE PRICE, INCENTIVE AND AVAILABLE DISCOUNT TRANSPARENCY TO THRIVE IN 2025

ZeroSum "State of the Dealer: 2024 Overview and 2025 Outlook" Outlines Supply/Demand Trends and Impacts in Automotive Retailing

GRAND RAPIDS, Mich., Jan. 14, 2025 /PRNewswire/ -- With vehicle inventories returning to pre-COVID levels and average new vehicle prices remaining over $50,000, auto dealers need to actively market available discounts and incentives to stand out in 2025.  

The findings were part of the "State of the Dealer: 2024 Overview and 2025 Outlook" report released today by ZeroSum, an industry-leading provider of software, data and marketing automation services to the automotive industry.

New vehicle inventory reached 3.25 million in Dec. 2024, closing in on the 3.3 to 3.5 million pre-covid levels. At the same time, vehicle movement—while up over the course of 2024—has not kept pace with the growth trajectory on the supply side.

Multiple factors have kept vehicle pricing at or just over $50,000 over the course of 2024. These include general inflation and its impact on OEM production costs, the discontinuation of lower-end models, and the emphasis on higher-end pickup trucks and SUVs and expensive trim packages to maximize profits.

"The dynamics of rising inventory, slower movement growth, and degrading velocity metrics would normally result in declining prices," said Jeff Englishmen, Vice President of Dealer Success at ZeroSum. "But these other factors have kept consumer costs elevated at a time of economic uncertainty. Dealers will have to navigate these challenging waters to remain competitive as 2025 gets started."

The report outlined actions dealers should take to better communicate price and value to car shoppers:

• Transparent pricing, including available discounts. For a consumer searching for a workable financial situation, a dealer showing reduced pricing will almost always have an advantage over ones that do not.
• Available incentives. Listing cash back, APR and lease offers on dealer vehicle detail pages is a key advantage in a high-supply, high-price selling environment.
• Extended loan periods. Making monthly payments more affordable may be the key between a current purchase and a delayed or deferred one.
• Product enhancements. Showing consumers the upgraded features and capabilities of a new model year will help to support higher prices for newer offerings compared to prices paid for previous purchases.

Used Vehicles: Supply Up, Prices Down

Used vehicle inventory grew to 1.95 million in December 2024, compared to an average of 1.68 million in 2023.On the other hand, used vehicle movement (1.16 million) was just equal to the monthly average in 2023 (1.15 million). While used vehicle prices are following a more expected pattern in such circumstances—dropping from almost $33,000 in Dec. 2022 to less than $26,000 at the end of 2024—much of this has to do with an older inventory profile as a shorter supply of new cars from 2021 and 2022 flow back into the Used market.

Currently, only 24.8% of all used vehicles are 1-to-3 years old, compared to 29.8% in 2022. Conversely, 42.7% of all used vehicles are currently more than seven years old, compared to 27.1% in 2022.

About ZeroSum
ZeroSum is a leader in software, marketing, and data. Powered by its SaaS platform, MarketAI, ZeroSum is simplifying and modernizing automotive marketing by leveraging artificial intelligence, data, and scaling ability to acquire new customers. ZeroSum is the first company that matches consumer demand with automotive data in real time. For more information, visit www.zerosum.ai.

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SOURCE ZeroSum