When gas prices hit $4 a gallon earlier this year, the local reaction was swift – and varied.
Some drivers opted for public transportation, while others traded in gas-guzzling SUVs for hybrids. Most just trimmed back their budgets to make room for the increased fuel cost.
When it comes to cars and driving, there’s a certain rugged individualism in Middle Tennessee. And even with gas prices dropping, still a little more than $3.50 a gallon on average in Middle Tennessee this week, this area’s love affair with the car isn’t likely to end anytime soon.
What has changed is the sheer diversity of the auto market and how auto buyers connect with it. Some parts of the Metro Nashville area are all about the growing roster of hybrids, while others are not only staying with all-gas models, they’re buying some of the most expensive ones out there. Whatever the case, consumers are more empowered than they’ve ever been before.
High-end market thrives
The willingness to lay down some serious cash is on full display at Maserati of Nashville, which opened in November 2011 in the Cool Springs Auto Mall in Franklin. Offering a full line of Maserati, Bentley and Rolls Royce vehicles, the dealership has been so successful that it’s already expanding its physical footprint and looking at additional vehicles to showcase, says Wesley Rasmussen, after-sales manager.
“Our company did some financial research and found that this market could support our vehicles, and that there were a lot of people who owned vehicles like these cars and were having to pay to ship them away for service,” Rasmussen says.
Ponying up $1,600 for shipping may not be a big deal for someone who can plunk down six figures on a car, but in a tight economy even Gucci belts get tightened.
“A lot of our clientele are people who come in for service, because they’ve really been waiting for this,” Rasumussen says. “We also are selling pre-owned vehicles along with new, and so we are seeing a lot of trade-ins. Our current expansion is so that we can continue to grow both our service and sales departments.”
The dealership will likely continue to see steady sales regardless of gas-price fluctuations, he predicts.
Tom Buckley is one of three partners in Maserati of Nashville, which also sells Rolls Royce, Bentley and high-end, pre-owned cars.
-- Photo: Lyle Graves | Nashville Ledger“These are statement cars, and most of our owners have several vehicles,” Rasmussen says. “They have some that are more economical for everyday use, while these come out on the weekends and special occasions.”
Preowned market strong
While the high-end market for new vehicles may just now be staging a comeback, the used market for more-expensive brands never really left.
In fact, people looking for these imports have kept the sales staff busy at Global Motorsports’ three locations for several years now, says Larry Thorn, general manager.
“Our business isn’t recession proof, but we have had a solid few years,” Thorn says. “People are much more conscious of what they are getting for their dollar in today’s economy, but they also want to drive a quality, late-model import. What they realize is that most of the depreciation has taken place by the time it’s a year or two old, so they come in to see what we have.”
The savings can be anywhere from 30 percent to 50 percent, so it’s another example of savvy consumerism, Thorn notes.
“We are in an affluent community where people want to drive nice cars,” he says. “Sometimes they’re willing to wait a little longer to get them. I know that mindset has been good for us, and I know that other high-end dealers around here also have found success with their pre-owned departments.”
Online research, buying at peak
Maserati of Nashville and Global Motorsports have robust websites designed to showcase inventory and get viewers into their dealerships.
That’s the case with most auto vendors now as online shopping continues to create a savvy class of consumers. In fact, two out of three consumers use an online car-buying tool such as Kelly Blue Book or visit a dealer’s site to look at pricing, inventory and financing options before they set foot on a lot.
“We have always done well on the Internet, but now 80 percent of people who buy a car has visited a website,” says David Hughes, Internet manager at Nelson Mazda’s downtown Nashville showroom.
How much?
The three cars on ths week’s cover are worth about $700,000 combined, if you choose mid-range option packages. Go all the way and it climbs to $766K. The Bentley is the most expensive, ranging from $291K to $360K. The Maserati goes for 126K to $144K.
“In the last two or three years it’s become evident that you have to put your best price forward, because you are competing against every other dealership in a virtual space, and people have learned how to look around very efficiently.”
Nelson’s buyers not only learn what the dealership has on the lot, they also are schooled on the vehicle themselves, so salespeople have to be on their toes.
“We have the most informed customers we have ever had,” Hughes says. “They know the features, all the ins and outs. If we get something wrong about the motor, they will correct us. And they also know all about the interest rates, the incentives we offer, so our financing people get grilled, as well.
“It’s been very good for us, because it means that we have to be that much better about knowing our product.”
This has led, in many cases, to the elimination of those marathon lot visits that included two or three test-drives, mountains of paperwork and a long wait for approval of financing.
“When I get an email, someone wants to know if the car they are looking at is still on the lot,” Hughes says. “Then they want to know about financing. Often we go back and forth on all the aspects of the deal, and when they get to the lot they are 100 percent finished. They just come in, take a drive to make sure they like the car, sign the paperwork and drive off.”
Consumers will likely continue to sharpen their shopping skills since auto prices are increasing and gas prices aren’t expected to drop significantly, says Jim Lott, Metro Nashville area executive for AAA.
“In the past, people had to buy these auto books, which didn’t make it easy to do the research,” Lott says. “The Internet has removed that obstacle.”
But however they do their shopping, area consumers aren’t likely to dial back on their auto buying anytime soon, he adds.
“We love our cars here and, even with our continually improving mass transit, there are still a lot of people who are going to drive, no matter what,” Lott adds.
“Middle Tennessee is in line with other midsize markets that AAA tracks in that regard. People are keeping cars longer, so they are looking for good mileage and other value-added components. But at the end of the day, they are still going to be driving.”