The holidays already stretch a household budget thin. Gifts, travel and hosting take their share before anyone even looks at a new vehicle. Add a car payment, an insurance bill and a few trips to the gas pump, and shoppers start asking one question above all others. Can I actually afford this? Dealers who answer that question clearly this season are going to stand out.
- Vehicle costs now reach well past the sticker, with insurance, fuel and financing all pressing on buyers.
- Hybrids are selling faster than gas-only models as fuel-conscious shoppers look for savings.
- Holiday campaigns work best when they lead with value and match the inventory a store really has.
Ownership Costs Keep Stacking Up
The average MSRP for a new vehicle hit $52,342 in September, according to Cars.com. That’s $521 more than the month before. Cars.com research also found that shoppers are putting off purchases and stretching loan terms to make the math work.
The sticker is only part of the story. Research from the Center for Automotive Research found that vehicle prices have risen only modestly once you adjust for inflation, and that the affordability challenge extends past the window price. Financing costs, changes in who’s buying and shifts in the kinds of vehicles people choose all affect what a car really costs a household.
Gas prices have eased a bit lately. But insurance, repairs, maintenance and monthly payments are still squeezing budgets, and drivers are changing how they drive and what they buy because of it.
CDK’s buyer research shows the strain too. Its Ease of Purchase score fell from 85% in the first quarter to 80% in the third. Gas prices, interest rates and confusion over costs all weighed on buyers.
Hybrids Are Moving Fast for a Reason
Fuel costs are nudging people toward electrified models. In CDK’s study, 65% of buyers said gas prices made them more open to options like hybrids and plug-in hybrids. The lot data backs that up. Cars.com found that new hybrids average about 44 days on the lot, compared with 75 days for gas-only vehicles. The same models are also selling faster than they did a year ago.
Cox Automotive’s chief economist has pointed to strong demand for affordable vehicles. Industry leaders have also named hybrids and late-model EVs coming off lease as good fits for cost-conscious buyers. Keep an eye on pricing for that second group, though. Used EV prices have climbed 9.8% since last September.
If a store has hybrids in stock, that’s a clear opening. A dealer with a Toyota Tundra Hybrid on the lot, for example, has an easy pitch for truck shoppers who keep a close eye on what they spend at the pump. Hybrid sedans and SUVs can do the same job for other kinds of buyers.
Turn Value Into the Holiday Message
Leading with affordability doesn’t have to mean racing to the lowest advertised price. It means helping shoppers see what they get for their money.
Different buyers need different messages. Here are a few that match common budget worries.
- Fuel economy for shoppers who wince at gas prices
- Lower-priced trims for buyers locked onto a monthly budget
- Pre-owned inventory for anyone who wants a lower starting price
- Plain, easy-to-read cost details for shoppers confused by the total price
Holiday digital campaigns can help shoppers quickly figure out which vehicles fit their budget, instead of only putting the spotlight on the vehicle itself. That’s especially useful when people are actively comparing options and bouncing between dealer sites.
The right message depends on what shoppers want and what’s actually on the lot. That’s why the best year-end plans pull from real inventory, website activity, lead performance and local shopping patterns. A one-size-fits-all holiday promo misses most of that and wastes money on ads that don’t connect.
Build Year-End Campaigns Around Real Budgets
Shoppers are watching their wallets, but they still need a way to get to work, to school and to Grandma’s house for the holidays. They’ll keep moving toward a purchase when a dealer makes the numbers easy to understand.
Start with the inventory you have. Match each vehicle to the buyer it helps most. Then say plainly how it saves money, whether that’s at the pump, on the monthly payment or at the starting price. Honest, useful marketing like that gives cost-conscious shoppers a reason to pick your store, and it makes every holiday ad dollar work a little harder.
