In a market where consumers are searching for more used cars than new cars, it’s essential that car dealers adapt to changing preferences to stay relevant and in business.
That’s exactly what many new cars dealers in Lehigh Valley are doing. “It hasn’t been profitable for new car departments for years,” said the owner of one dealership in the area. “I love being a new car dealer but economically speaking, it just makes sense to sell used cars now.” He went on to say that switching to an all used car inventory is financially better because they can sell more used cars at cheaper prices since they no longer have the expense of carrying new cars.
When selling new cars, some medium to larger dealerships keep at least $3 million worth of new cars on their lots. The company has to pay monthly interest on those cars, which is about $30,000 on $3 million. And since banks and lenders have become stricter on giving out new car loans, people just aren’t buying them like they used to and dealerships get stuck with a large interest payment that they cannot afford.
Besides that, with better quality and better prices, used cars are just a smarter option in today’s economic times.