Four Reasons for Auto-Dealer Optimism

 Fuel economy has improved 100% since 1975. It now averages 27 mpg 10.5 (L/100 km), he says. “And gasoline, adjusted for inflation, is at an all-time low.”

 The average vehicle on the road today is about 11 years old, meaning owners of the oldies inevitably will return to the market soon. Allan says a $3,000 repair bill on a vehicle valued at $3,000 is an inducement to buy a replacement. “In many cases it costs less to drive a new car with a monthly payment than to drive an old car with no payments.”

 Although the average vehicle transaction price is about $34,000 today, new vehicles rarely have been more affordable, with income and inflation adjustments factored in. In 1995, it took 29 weeks of an average household income to cover the cost of a vehicle purchase; today, it is 24 weeks, he says.

 Retailers are using new technology to serve and engage with customers. It’s a heightened way of doing business and staying in touch. That includes the emerging use of artificial intelligence. “AI will fill a gap, and dealers are in the best position to leverage it,” Allan says. “It’s fun being alive during the transition.”