Household Debt Is Stacking Up

There are a lot of facts about the growth of consumer debt in the fourth quarter of 2023, and trends over the last few years. The news isn’t great.

  • U.S. credit card debt hit an all-time high of $930 billion
  • Debt surpassed the $870 billion peak during the 2008 financial crisis
  • Credit card delinquency rates increased .16% from the prior quarter to 5.32%
  • Younger Americans (18 to 29) have a 76% higher delinquency rate than anyone else.

Car wash customers in younger demographics represent a lot of potential upside for your business. And their financial stress can be a big deterrent to their ability – real or imagined – to spend money at your car wash.

For many, an answer is simply balance transfers from one credit card option to another. Not the best answer, but many individuals try nonetheless.

More facts reported from different sources in the pandemic revealed some staggering information about student loan debt and other aspects of ‘home economics’.

  • Student loan debt had exploded over the last 17 years, growing some 546% from 2003 through 2020
  • Auto loans have also increased substantially, growing by 114%…
  • Every category of consumer debt had increased…with the exception of other miscellaneous types of debt, which had decreased 12% since 2003

What does it mean for a car wash owner?

What’s it mean? Often, economic times require retailers to adjust strategy to make sure they get a share of discretionary spending. Times of high inflation and shrinking wages present particularly tough times to build sales. But some tried and true strategies can help deliver sales by alleviating pressure on consumers – particularly younger demographics.

Free Wash Programs like one offered through the WashCard UWashApp can drive traffic. Younger consumers totally understand the value of a mobile app and how to use them. 

Referral Programs that offer a free-wash-for-referrals are also attractive. Your younger visitors like doing referrals and understand how to share the app technology with friends and family.

Umbrella Policy ReWash programs which can be sold for as little as $2.00 offer a great perceived value to consumers. Our 2023 data roundup of independent car wash owners confirmed that profit margin after claimed rewashes delivered a 92.7% net profit – and that includes the costs of rewashes.

There are a lot of ways to create value in your business. A value that will keep budget-crunched customers coming to the wash. They will reward you for helping them out in tougher times with more loyalty and more profit.