Now is a perfect time for finance managers to mine dealership databases for sales opportunities, especially to customers coming off loans or leases.
The reason is the looming shortage of used cars, resulting from the drop in new-car sales in 2008 and '09.
The shortage is driving up used-car prices. In turn, that means fewer buyers are going to be "upside-down," the term for when the customer owes more on the car than it's worth. A "right-side-up" buyer with positive equity can put the money from their trade-in toward a new car.
The finance manager who can uncover positive-equity shoppers will have a leg up on the competition.
"From 2008 to 2010, total car sales will be around 35 million, new and used. From 2000 to 2002, it was 55 million," says Tom Webb, chief economist for Manheim Consulting in Atlanta. "The coming shortage will be in 3- and 4-year-old cars."