Navigating today’s auto market can be challenging for a number of reasons. 2021 saw a shortage in microchips essential for producing new cars, making new models in short supply and inflating prices significantly. This also brought a boom in the used car market. How did we get here? While the pandemic played a big role in today’s rapidly changing market, it is also important to understand the history of new and used car dealerships, and how their business has responded to changes in the market over the years. At Steve’s Auto Sales, we have supplied Billings, MT with used cars, trucks, and SUVs since 1981. Through various changes in the market, we have adapted our business model and consistently provided what our customers needed.
How Did the Car Lot Start?
The first automobile was patented by Karl Benz of Germany in 1880. Up until World War II, automobiles were largely a luxury item, with 50% of the global supply being produced in France in 1903. At the end of WWII, soldiers returning home to the United States and Europe brought a huge influx of demand for new cars. This era is commonly referred to as the “car boom”. This is effectively when the modern “car lot” began. In 1958, there was legislation introduced requiring dealerships to place a sticker on every vehicle with a suggested retail price and a list of features it is equipped with. With this invention, customers could browse car dealership lots, comparing prices and features with ease – effectively transforming the car shopping experience.
How the Economy Has Changed Car Dealerships
Setbacks like supply shortages during WWII, the fuel crisis of the early 70s, and the great recession of 2008 have forced car dealerships to adapt and change their approach, based on the consumer needs. During the 1970s fuel crisis, many manufacturers saw rising material and production costs, forcing them to reduce the number of models they produced, and increase their prices. Since this both limited the selection for consumer, and raised the price per unit, dealerships responded by introducing the concept of leasing. This helped customers afford the vehicles they wanted, and kept dealerships afloat until fuel prices and production costs returned to normal. Over time, leasing also increased how frequently consumers purchase new vehicles – from every 5 years, to every 2-3 years. This inspired car companies to ramp up production and expand their model lineup.
The recession of 2008 hit many auto manufacturers hard, forcing some well-known American brands to be discontinued, and major manufacturers to seek government bailouts. Auto Dealerships felt the pinch as well, with 4% of the approximately 20,000 dealerships closing in 2008. This resulted in great consolidation of local dealerships, where you might find competitive brands being sold by dealers under the same ownerships. This trend has carried into today, and is common to see in many small-town economies that wouldn’t otherwise support multiple car dealerships.
Carrying Past Knowledge into Today’s Market
Quick to pivot according to changing consumer demands, today’s auto dealerships have responded to the need to have all of their inventory and product information accessible online. By making shopping and comparing new and used vehicles all possible within an online catalogue, car dealerships help maintain their customer loyalty and gain new clients. In the case of used car dealerships with continuously changing inventory, this is an exceptionally helpful tool to keep track of any vehicles you are interested in, and look out for new options as they come in. As the United States auto market continues to grow and change with the times, the very best car dealerships will adapt to provide the best selection and service possible.
Steve’s Auto Sales is Billings, MT top-choice for quality used cars, trucks, and SUVs. Our sales staff has in-depth knowledge on all the latest models, brands, price points, and more to help you make the most informed purchasing decision for your needs. Combine our impressive inventory with competitive prices, affordable interests rates, and a commitment to quality service, and you can trust the entire car buying process will be easy from beginning to end. Want to learn more? Call us today at 406-304-5513, browse our used cars for sale
, or stop by our showroom at 3520 1st Ave N Billings, MT 59101.