This Week in Car Buying: Kelley Blue Book offers instant cash for cars; Jeep branches out; Volvo to spiff up showrooms; Higher loans, more leases in store
Kelley Blue Book is now offering an Instant Cash Offer for your current car which guarantees a redeemable offer at participating dealerships across the country. The Kelley Blue Book Instant Cash Offer is also available through our sister site, Autotrader.com. The offer can be used towards a new car purchase or you can simply walk away with a check.
"The Kelley Blue Book Instant Cash Offer is a quick and easy way for car owners to sell or trade in a car without having to negotiate the price," said Juan Flores, general manager of Instant Cash Offers operations for Cox Automotive. "Simply take a few minutes to provide information about your vehicle, including its current condition, and walk into a participating dealership knowing the deal you've made is based on trusted Kelley Blue Book information."
The Kelley Blue Book Instant Cash Offer is powered by a tool that calculates the car's value based on current transaction data for hundreds of thousands of vehicles, as well as up-to-the-minute supply and demand information, and then produces the offer. Consumers accessing the system at home will be provided with a list of participating dealerships. They can print out and take that offer certificate to the dealer for an inspection to verify the vehicle information and condition. The offer is valid for 72 hours and redeemable that same day upon verification of the car's condition and features.
The Kelley Blue Book Instant Cash Offer was previously known as the Autotrader Instant Cash Offer.
Jeep branches out
Already one of the hottest selling brands in the Fiat Chrysler Automobiles stable, Jeep is looking to expand its presence by allowing current dealers to set up satellite centers for the SUV specialist. In addition to making Jeep vehicles more visible, the move would help free up space at crowded FCA stores with multiple franchises including Chrysler, Dodge and Ram trucks.
By setting up the satellite centers, Jeep would be able to not only increase its visibility but also have floor space that could be used to boost accessory sales. And additional room will be needed as Jeep expands its line from the entry level Renegade to a new range topping Grand Wagoneer expected in time for the 2019 model year.
Volvo dealership makeovers in store
According to the Wall Street Journal, Volvo is looking to spiff up its existing dealerships as it remakes its lineup and looks to greatly expand sales. Volvo North America chief Lex Kerssemakers told the paper in an interview that "I'm giving a thunder speech to retailers: 'Guys, it doesn't work like this anymore'. Now we got good cars, we need to work on how we receive customers."
Last year, Volvo sold about 56,000 cars through its 295 dealers. The Swedish automaker is looking to significantly boost those totals through the introduction of the all-new XC90 and the S90 flagship sedan, as well as expanding the number of vehicles built in China and exported to the U.S.
The introduction of new models, especially high-margin vehicles like the XC90 and the upcoming S90, should provide the dealers with the funds they need to upgrade their facilities, Kerssemakers said. He added that the company will also give incentives to enable their franchisees to make the improvements.
Loan balances, leasing to rise in 2016
The continuing trend of rising transaction prices isn't expected to slow down during 2016 and industry analysts are looking to an increase in loan balances and leasing as consumers find ways to acquire ever more expensive vehicles.
According to a TransUnion forecast, auto loan and lease balances will increase by over $500 by the third quarter of next year, from the current $17,985 to a record $18,509, Automotive News reports. That's an increase of more than $3,500 from the end of 2009, when the average balance was only $14,956.
However, these rising balances aren't necessarily cause for alarm, said Jason Laky, senior vice president and automotive business leader for TransUnion. In a statement accompanying the report, he said there exists "a healthy equilibrium between growing balances and low delinquency rates." Those delinquency rates are expected to remain about 1.11 percent, down from 1.16 percent in 2014. TransUnion also observed that there are fewer subprime borrowers who hold loans now than in 2009.
"While auto lenders are certainly extending loans and leases to consumers who present a higher risk, these consumers have been able to manager their auto loan obligations in line with expectations," Laky said in the statement. "We believe we have reached a 'new normal' in auto delinquency and see no immediate cause for concern."
What automakers spend to reach you
Literally billions. According to Advertising Age, three of the top 10 advertisers are Toyota, Volkswagen and GM, the former pair spending over $3.1 billion and the latter $2.8 billion in annual advertising. They are not alone. Nissan is also in the $2 billion club, while Ford and Fiat Chrysler Automobiles spend $1.9 billion each, Honda, $1.4 billion and Hyundai $1.1 billion.
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