For five consecutive months in 2015, more than one-third of all the new vehicles sold in the US were SUVs and crossovers. Utility vehicles have earned a big enough share of the market to gain 50,000 extra unit sales year-over-year. And, that's in a market where passenger car sales dipped by nearly 30,000 units. It's pretty obvious that CUVs are a hot commodity, the big questions; why and will it last? (read more)
Top reasons consumers are infatuated with crossovers include:
Bigger Selection & New Designs - with most manufacturers now fully invested in the category, buyers have a dazzling array of choices. Standard bearers like Ford, Honda and Jeep are riding the cutting-edge of style, form and function and have been joined by makers like Hyundai, Kia, Mazda and others to give consumers an ever-broadening selection of crossovers to choose from.
Fuel Economy - With the introduction of smaller, turbocharged gas engines, better aerodynamics, high-gear-count transmissions and other technical improvements, crossovers are getting better fuel economy than ever. Lower fuel prices have eased some consumer concerns while fuel efficient crossovers provide an additional measure of confidence and a hedge against rising fuel prices in the future.
Safety - Crossovers tend to do well in crash tests – especially compared to smaller sedans and compacts. Drivers like the higher vantage point and additional ground clearance afforded by crossovers. Not many sedans offer all-wheel drive but practically every crossover out there offers this feature and in many regions of the country – especially the snow belt – traction is king.
Versatility - It's hard to beat crossovers for hauling people and gear, towing, off-road capability and navigating difficult conditions. People may not always take full advantage of these features but they love having them available.
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There's a growing trend among millennials to opt for leasing a vehicle. 2015 car registration data from Polk shows that leasing accounts for 28.9% of all new-car purchases by buyers in the 18-34 age range. The average lease penetration for all buyers is 26.7%.
The data also suggests this isn't a fluke. Leasing among buyers in the 18-34 range has increased 46% over the last 5 years compared to a 41% increase among all other demographics. Research shows it may have something to do with the number "3".
So, what's driving the uptick in leasing among millennials?
Millennials are usually on tight budgets. But, they're also interested in making the most of it and they're discovering that leasing can be a good way to get the vehicles, features and options they want. “Most Millennials understand and accept that they’re on a tight budget and that they need to stick to it,” said Jessica Caldwell, director of industry analysis for Edmunds. “But it doesn’t mean that their financial constraints limit them only to the most basic vehicles to get from point A to point B.”
Of course, there are limits and for millennials the key seems to be keeping the numbers under the "3's". A recent survey found the majority of millennials were unwilling to put more than $2,999 down on a vehicle and wouldn't pay more than $299 per month. With those parameters in mind, most finance purchases would be limited to a vehicle priced under $20,000. Applying the same numbers to a lease, millennial shoppers could consider vehicles in the $30k - $35k range.
“If they see a chance to get into a nicer car while staying within their budget, they’re likely to explore that opportunity,” said Caldwell. “In most cases, leasing opens the door to the bells and whistles that they couldn’t otherwise afford.”
Millennials in the Midwest are leading the leasing trend with Minneapolis-St. Paul, Milwaukee and Grand Rapids-Kalamazoo as the top 3 leasing markets.
The top brands for millennials include Ram, GMC, Lexus, Jaguar and Cadillac - nameplates millennials are 20% to 30% more likely to lease than the general population.
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While long term consumer confidence remains strong, short term confidence took a slight dip in July, possibly due to concerns over volatility in financial markets prompted by the situation in Greece and China. However, stronger than expected sales, higher transaction prices, moderate fuel prices and a strengthening economy are all factors in NADA's decision to revise their 2015 sales forecast UP...but how much?
How does 17.17 million sound? That’s right. 17.17 million up.
Sales have been dramatically boosted by increased consumer demand for light trucks, especially Crossovers and SUVs. Excellent response to incentives and very strong Memorial Day sales all contribute to NADA's revised forecast.
According to Lynn Franco, Director of Economic Indicators at The Conference Board: "Consumer confidence remains at levels associated with an expanding economy and a relatively confident consumer."
CarSoup.com provides you the opportunity to promote your incentives by body type – including Crossovers & SUVs. Contact email@example.com to learn more.
Check out the NADA article here.
Our congratulations go out to Waconia Ford and Swant Graber Auto Group for being chosen as CarSoup.com's Dealers Of The Month for July.
Barron, Wisc.-based Swant Graber is a franchised dealer for Chevrolet, Dodge,
Ford and Ram was recognized for embracing the digital advertising world and showing that a small town dealership cannot only play but win battles using all forms of digital.
Waconia Ford was recognized for embracing new ideas and products to increase exposure and for its overall work in digital marketing. Waconia Ford is a franchised Ford dealer serving Waconia and the surrounding Twin Cities area.