Car Dealer and Car Buyer Report2023
How did consumers engage with offers to trade or sell their car to the dealership, the payments on dealer websites and advertising, and in dealership lead response. First, we processed a lot of DMS data for our dealers to find the right customers in the right cars. And then we automated offers to those customers to generate the engagement below. Finally, dealers closed deals that resulted in the ROI at the bottom.
1,934,815
Service Repair Orders Processed for Equity
1,145,786
Past Sold Loans Processed for Equity
43,553
Expiring Leases Processed for New Offers
98,813
Past Sold “Cash/Credit Union” Deals Processed for Equity
How much equity did consumers have?2023
While new car inventories were constrained across the United States, used car values peaked.
Used car values fluctuated in 2023 as certain vehicle models became available as new cars again. At this time, the first wave of pre-owned EVs hit the market in large quantities, and we saw a new phenomenon where a single manufacturer (Tesla, in this case) could shape the values of an entire segment of vehicles.
FRIKINtech works with no Tesla stores. Our clients are franchised and independent car dealerships whose main inventories consist of Internally Combustible Engined (ICE) vehicles. Electric motor Vehicles (EVs) were not a major factor in any numbers shown in this study.
Also of note is the customization capabilities within FRIKINtech products. Both SERVICEiQ and EQUITYiQ allow dealers to determine the equity thresholds, vehicle age, make, models, and miles they wish to target. In most cases, cars older than 10 years in age or with over 100,000 miles were not dealer targets. The bulk of this study is built on vehicles dealers wanted.
2020
Most traded Model Year
$9,387
Average Equity Seen
44.5%
Conquested customers who changed their payoff to $0
17,481
Average number of customers in a dealer's database
69.4%
Amount of a dealer's past sold customers who are in equity
How people financed cars2023
EQUITYiQ focuses on past sold and current lease customers whose leases are coming due. SERVICEiQ uses inception to help service customers realize they can trade or sell their current car now.
In all cases, a consistent process is performed to touch customers without the need for dealership staff to do anything.
We believe the higher leasing and loan rates are due to informing the customer of their equity capabilites. Many customers were excited to learn they could do something and did not take the time to research with their credit unions, save up to pay cash, or they decided to lease again.
%
Of total gross was on the resale of acquired vehicles
Buying cars from customers
- Percent of Service deals that were straight vehicle acquisitions 29.3%
- Percent of past sold & lease deals that were straight vehicle acquisitions 11.4%
How much people paid for service2023
$513
Average Repair Order paid.
$564
Average Repair Order paid before trading or selling car to dealer.
8%
Amount of Repair Orders paid over $1,500.
The average age of a vehicle on the road was 12.4 years old in 2023. This is a record in the United States and the trend looks to continue into 2024. People are seeing larger service bills than they have seen before.
Motor vehicle repair prices have jumped a staggering 23% over the last year, an inflation rate nearly four times higher than overall price increases…
New quarter, new record:
Average monthly payment in Q4 hit $739 — a new all-time high.
Surprising?
When repair orders and car payments meet, what kind of psychological effect does that have on a customer?
“If I’m going to pay this much to maintain this old thing, I might as well pay a little more to drive a new one.”
Dealership retention rates2023
85% of customers bought a different model car than they traded
19.3% of total sales were to customers with prior sold history
63% of serviced vehicles were not bought from that store
We are curious why our competition focuses customers on the newer version of the car they’re already driving when so few buy the same car again.
SERVICEiQ is the only product allowing you to consistently conquest service customers through automation and needs no sold history.
Customer Engagement with Automated Offers2023
44%
Email Open Rate
13%
Click Thru Rate
Dealership email marketing historically sees a 20% open rate with a 3% click thru rate.
1,000,000+
Texts Sent
11%
Opt-in Rate
Texting was particularly strong with service customers. This makes sense because they were just in the dealership and may have been texting with their service writer.
4%
Mail Conversion Rate
Dealership mailers historically convert at 0.05% and usually require a phone call to get rates higher than half a percent.
83%
Mobile Visits
36%
Return Visits
11
Clicks/taps per Visit
Dealership Return on Investment2023
Average Advertising Cost per New Car Sale
$692
As of June 2023 in NADA’s 2023 Midyear Report
$77.39
Cost per sale with FRIKINtech products to past sold and service customers of the dealership
Where our data came from2023
- Dealer’s DMS historical sold data
- Dealer’s DMS historical service history
- Dealer’s DMS daily deal data
- Dealer’s DMS daily service repair order data
- Dealer targeting customization for equity threshold, vehicle age, vehicle mileage, make, and model
- Dealership websites with WEBSITEiQ installed
- Dealership CRM lead response with SALESiQ installed
- Insurance carrier & agency offers via dealer CRM and DMS data
- Delivery of text, email, and mail messages
- Response and engagement of customers within illumiQUOTE app