Weathering the Affordability Crisis: Strategies for Success for Automotive Retailers and Agencies

The current economic climate presents challenges that directly impact consumer affordability. Between persistent supply chain disruptions, inflation, layoffs, and the looming threat of a recession, buyers are being more cautious with their spending. As you work to match customers with the right vehicle, it’s essential to focus on those who can—and will—complete a purchase.

Maybe you’ve already outlined your ideal customer profile. While broad income data might offer some direction, traditional surveys rely on self-reported information, which is often inaccurate. Without hard data, your strategy could be built on guesswork rather than facts.

The Bottom Line: Affordability Drives the Customer Journey

At the core of every purchase decision is one simple factor—can the customer afford it? And affordability isn’t just about income; it’s about the full financial picture.

The Flaws in Traditional Income Data

Income data is notoriously unreliable. Because marketers often rely on “directionally accurate” figures, many decisions are based on outdated or incomplete information. Here’s why:

• Most income data is pulled from surveys that only sample 1-2% of the U.S. population.

• These surveys are updated infrequently—sometimes only every two or three years.

• Reported income alone doesn’t account for essential expenses like housing, utilities, or healthcare.

• Additional income sources, such as investments, business earnings, and retirement funds, are often overlooked.

• Households in the same neighborhood are often treated as financial equals, even though their economic situations may vary widely.

• Traditional data doesn’t factor in spending behavior or available credit, both of which impact purchasing power.

In short, relying solely on generalized income data can lead to missed opportunities and wasted efforts.

Income vs. True Affordability

Rather than relying on broad income estimates, it’s crucial to work with precise affordability data. Here’s why:

• Income data alone doesn’t show how much discretionary income a customer has.

• Real affordability data considers fixed costs, spending habits, and credit availability.

• Knowing a customer’s true purchasing power helps you focus on qualified buyers, improving conversion rates.

By using affordability data instead of general income figures, you can ensure your marketing and sales efforts are targeted and effective.

Leveraging Affordability Data for Better Results

Without clear insight into a potential buyer’s financial situation, you risk wasting resources on customers who ultimately can’t complete a purchase. 

How can you avoid this costly mistake? Here are some key strategies:

• Target audiences based on affordability. Move beyond “look-alike” modeling and use precise data to refine your approach.

• Implement real-time personalization. Tailor your messaging and offers based on real affordability insights.

• Ensure a seamless customer experience. Reduce friction in the buying process by making affordability-driven recommendations.

• Analyze your existing data. Use internal insights to fine-tune your strategy.

• Offer relevant vehicle options. Match customers with cars they can realistically afford, increasing satisfaction and closing rates.

Make Data Work for You

When you use accurate affordability data, you don’t just find more customers—you find the right customers. Equifax can help you access the insights you need to build better relationships, improve efficiency, and drive more sales.

Want to learn how affordability data can help your business? Check out the latest automotive resources and solutions.

All statistics cited in this blog are derived from Equifax data and internal market analyses.