5 ways cars are easier to pay for than healthcare

Providers need to rethink financing and promotion strategies

The cost of healthcare weighs heavily on the American consumer. Many can barely afford to maintain minimal insurance coverage, and many put off necessary care because of the financial burden. Yet, at the same time, US car sales have shown only minor fluctuations and dips only during the steepest drops in the economy. So, how is it that Americans are still buying cars (very expensive cars), but putting off healthcare procedures? It may all come down to the ease of the transaction.

Let’s compare some numbers. The 10 year average cost of a new car in America is just under $31,000. The average adjusted gross income for a married person filing separately in 2014 (the last year for which full data is available): just under $67,000. Ratio-wise, that means a new car is more than 46% of adjusted income. That’s a huge percentage. And unlike healthcare, there are no insurance subsidies on the cost.

So why aren’t people complaining about the cost of new cars? Especially when, as the data shows, that cost has gone up steadily over the last 10 years? It’s because the automobile industry has made it much easier to pay for their products. And healthcare providers who can innovate here stand to win big.

5 ways car companies make it easier to pay

Financing: Car buyers have lots of options for breaking a big lump sum into a bunch of smaller parts, making it substantially easier to afford a big cost. There’s also a lot of competition for auto loans from national banks, regional banks and even dealers themselves. All of this makes it easier for consumers to get a good, manageable cost without using a high-interest credit card.

Promotions: It seems like there’s always an ad on TV with buying incentives. They happen at the local level (i.e. promotions from dealerships) and at the national level (i.e. promotions from brands themselves). They can make a big impact on a buyer, who might sometimes be able to buy a new car with no money changing hands at the moment of transaction.

Negotiation: Why do auto dealers need salespeople? Because baked into the structure of the auto industry is the expectation that prices are negotiable. That puts a bit more power into the consumer’s hands, and makes it easier to work out a deal that fits a given person’s means.

Online tools: Want to know how much you should be paying for that new car? Check out Kelly Blue Book’s website. Want to know how much people in your area paid for a similar car? Check out TrueCar. Want something more specific? At the time of writing, Google had nearly 8 million results for the query online car buying tools. 

Disruptive business models: Carmax has heavily advertised, and promises a no-haggle buying experience. They’re just one of the newer entrants to the auto market that has big disruptive possibilities. Healthcare has lots of these entrants at the gates, including Amazon, Walmart and CVS. These are some of the biggest brands on the planet.

How could your practice or network apply these tactics to simplify financing options for healthcare consumers? To learn more about marketing and pricing strategies, read our new ebook, Mindset Reset: How the Cost of Healthcare is your Biggest Brand Opportunity, and watch for new blogs on managing healthcare costs.