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Changes on the car lot
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| H&N photo by Andrew Mariman Robert Sudeith, general manager at West One Auto in Klamath Falls, stands next to a new Pontiac sedan Thursday. According to Sudeith, consumers are still buying autos, just not the large SUVs. |
With gas mileage a big concern, dealers are responding
By Ryan Pfeil
H&N Staff Writer
Cascade Auto general manager Ryan Johnson said he is sold out of the new Honda Civic Hybrids until July.
“I can’t keep those in stock,” Johnson said, explaining the fuel economy and green technology are attractive to buyers.
According to Johnson and several other local dealerships, the market for car buying is not suffering in the Klamath Basin.
But with gas reaching prices of more than $4 a gallon, several trends in the automobile market are shifting, experts say. Those in the business are adopting new strategies for buying from manufacturers, marketing, taking trade-ins and educating consumers.
Consumers are still purchasing trucks and SUVs, but the number has significantly decreased.
Gas mileage
Klamath Falls Lithia Motors used to purchase about 80 percent trucks and SUVs, and 20 percent cars from their manufacturers, said general manager Phil Valbert. The number of trucks and SUVs purchased from manufacturers has dropped to about 60 percent, while cars increased to about 40 percent.
A community’s needs will also determine the types of vehicles a dealership will
purchase.
“One thing that we still have to understand is there’s more of a necessity for trucks and SUVs (here) than there are in other communities,” Valbert said.
Hybrids and crossover SUVs are the primary purchases for many Basin dealerships from manufacturers because of their popularity among consumers.
Marketing
Several dealerships are putting their most economical new and pre-owned cars on the front lines so consumers have a clear view.
“If a customer’s driving by, they see those vehicles,” said Harvest Ford general manager Joe Reister.
Dealerships also advertise fuel economy on most of their vehicles and try to make sure prices are clearly marked.
Disagreements on price are often related to Internet sites where the vehicle has a lower price than the lot is selling it for, Reister said. These online car sale catalogues, such as edmonds.com, oftentimes will not include any options, leading to the difference in price.
Limited warranties and flexible refund options are other strategies dealerships are pushing more aggressively. Above all, many dealerships are making an effort to put customer service first.
Trade-ins
Because of the price of gas, many of the more recent trade-ins have lower gas mileage. The challenge for dealerships is knowing whether trade-ins can be resold again quickly.
Kelly Blue Book’s Web site, www.kbb.com, attaches values to used vehicles based on their condition, year, mileage, and other factors. The value of each vehicle decreases on average every two months.
“That’s something we take into consideration when we take in trade-ins,” Valbert said. “We have to look into the future and consider whether we’re going to have it 60 or 90 days.”
Trade-ins
David Fleming-Jones, owner of Klamath Superior Motors, said that some dealerships in Northern California have stopped taking trucks on trade.
“Nobody wants them,” Fleming-Jones said. “Especially in the big cities.”
Many local dealerships are still taking trade-ins. The main thing for customers to remember is the market determines the value of any vehicle, not the dealer, businesses say.
“Everybody thinks dealers pull this magic number out, but they don’t,” Fleming-Jones said.
Educating the customer
Many consumers aren’t just concerned with fuel economy on cars. They’re concerned with everything, said Robert Sudeith, general manager of West One Auto.
A customer’s needs must be taken into account, as well as their budget. Sudeith described car buying as an emotional experience. Oftentimes, customers will come in to a dealership with an exact car in mind, even though they cannot afford it.
Sudeith said he has instructed his employees to make customers aware of what they can afford based on credit history and available funds. Sometimes, it is not enough.
“A lot of times you can’t change a person’s mind,” Sudeith said. “Some people are budget cautious, and some people just spend beyond their means. There’s no question about it.”
In the end, it is a customer’s decision, Reister said.
“We’re not here to spend their money for them,” he said.
Sudeith has noticed that more customers are paying for cars in cash instead of financing.
Payment options
Consumers should also check on financing options on and off the lots.
Local banks have seen a decrease in applications because of more financing options available at the dealerships.
Efficiency in car sales is also important to consumers, experts say.
“People are really time sensitive,” said Marna Batsell, a personal banker at U.S. Bank. “They can go to a dealership and get it all done in a day.”
Many bank loans for cars go toward a consumer purchasing from private parties and advertisements, Batsell said.
Several dealers encouraged consumers to begin with Consumer Reports and Kelly Blue Book to find the best deals. The Fuel Economy Guide, available at several dealerships, is another good resource, experts said.
“I can’t keep those in stock,” Johnson said, explaining the fuel economy and green technology are attractive to buyers.
According to Johnson and several other local dealerships, the market for car buying is not suffering in the Klamath Basin.
But with gas reaching prices of more than $4 a gallon, several trends in the automobile market are shifting, experts say. Those in the business are adopting new strategies for buying from manufacturers, marketing, taking trade-ins and educating consumers.
Consumers are still purchasing trucks and SUVs, but the number has significantly decreased.
Gas mileage
Klamath Falls Lithia Motors used to purchase about 80 percent trucks and SUVs, and 20 percent cars from their manufacturers, said general manager Phil Valbert. The number of trucks and SUVs purchased from manufacturers has dropped to about 60 percent, while cars increased to about 40 percent.
A community’s needs will also determine the types of vehicles a dealership will
purchase.
“One thing that we still have to understand is there’s more of a necessity for trucks and SUVs (here) than there are in other communities,” Valbert said.
Hybrids and crossover SUVs are the primary purchases for many Basin dealerships from manufacturers because of their popularity among consumers.
Marketing
Several dealerships are putting their most economical new and pre-owned cars on the front lines so consumers have a clear view.
“If a customer’s driving by, they see those vehicles,” said Harvest Ford general manager Joe Reister.
Dealerships also advertise fuel economy on most of their vehicles and try to make sure prices are clearly marked.
Disagreements on price are often related to Internet sites where the vehicle has a lower price than the lot is selling it for, Reister said. These online car sale catalogues, such as edmonds.com, oftentimes will not include any options, leading to the difference in price.
Limited warranties and flexible refund options are other strategies dealerships are pushing more aggressively. Above all, many dealerships are making an effort to put customer service first.
Trade-ins
Because of the price of gas, many of the more recent trade-ins have lower gas mileage. The challenge for dealerships is knowing whether trade-ins can be resold again quickly.
Kelly Blue Book’s Web site, www.kbb.com, attaches values to used vehicles based on their condition, year, mileage, and other factors. The value of each vehicle decreases on average every two months.
“That’s something we take into consideration when we take in trade-ins,” Valbert said. “We have to look into the future and consider whether we’re going to have it 60 or 90 days.”
Trade-ins
David Fleming-Jones, owner of Klamath Superior Motors, said that some dealerships in Northern California have stopped taking trucks on trade.
“Nobody wants them,” Fleming-Jones said. “Especially in the big cities.”
Many local dealerships are still taking trade-ins. The main thing for customers to remember is the market determines the value of any vehicle, not the dealer, businesses say.
“Everybody thinks dealers pull this magic number out, but they don’t,” Fleming-Jones said.
Educating the customer
Many consumers aren’t just concerned with fuel economy on cars. They’re concerned with everything, said Robert Sudeith, general manager of West One Auto.
A customer’s needs must be taken into account, as well as their budget. Sudeith described car buying as an emotional experience. Oftentimes, customers will come in to a dealership with an exact car in mind, even though they cannot afford it.
Sudeith said he has instructed his employees to make customers aware of what they can afford based on credit history and available funds. Sometimes, it is not enough.
“A lot of times you can’t change a person’s mind,” Sudeith said. “Some people are budget cautious, and some people just spend beyond their means. There’s no question about it.”
In the end, it is a customer’s decision, Reister said.
“We’re not here to spend their money for them,” he said.
Sudeith has noticed that more customers are paying for cars in cash instead of financing.
Payment options
Consumers should also check on financing options on and off the lots.
Local banks have seen a decrease in applications because of more financing options available at the dealerships.
Efficiency in car sales is also important to consumers, experts say.
“People are really time sensitive,” said Marna Batsell, a personal banker at U.S. Bank. “They can go to a dealership and get it all done in a day.”
Many bank loans for cars go toward a consumer purchasing from private parties and advertisements, Batsell said.
Several dealers encouraged consumers to begin with Consumer Reports and Kelly Blue Book to find the best deals. The Fuel Economy Guide, available at several dealerships, is another good resource, experts said.
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| Changes on the car lot |
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