6 Ways to Get Used
Your pre-owned inventory could be your most undervalued tool. GSM offers six keys to maximizing the market value of every used unit.
December 2016, Auto Dealer Today - Feature
Whether you love them or hate them, used cars are a huge part of our livelihood. They generate profit for everyone in the dealership and need to be a focus of every department. We have all heard that we are in the midst of a market correction and there is some potential pain coming for the unprepared. Whether times are good or bad, good habits will maximize our volume as well as our gross.
With all that in mind, here are six proven ways to build solid processes we can rely on in 2017 and beyond:
1. Reduce Time to Lot.
How long does it take you to get a vehicle from the trade line to the front line? This is extremely important, because the used-car market is always going down. Getting 99% of market value today or 90% in 30 days can mean a difference of hundreds and sometimes thousands of dollars — on every unit!
To help ensure you get them on the lot quickly, you must manage the process through all departments, and everyone has to have a stake in it. If service is taking too long, hold them accountable. Perhaps they only get 90% of the RO if it takes them more than three days to get a car out. You cannot allow any department to cannibalize gross through inefficiency.
2. Train Your Sales Team.
How many good, solid used-car salespeople do you have? Do you have a dedicated staff or can they cross-sell? Can they handle “as-is” cars? Used vehicles are unique. No two units are alike. Your salespeople have to know their inventory and work those deals correctly. Their success can lift the entire dealership, and your training must reflect that.
3. Appoint a Dedicated Manager.
Is your pre-owned manager a used-car manager or a desk manager? To me, a used-car manager lives and breathes their inventory. They know where each unit is parked, its color, trim level and equipment, and whether the previous owner was a smoker.
You absolutely cannot effectively manage a pre-owned inventory from a desk in an office. You have to be in the cars constantly. They must always be ready for sale, and somebody has to know whether they will start, have gas, look good and smell good.
4. Repave Your Virtual Lot.
Your online used-car inventory should be stocked with lots of good pictures and accurate, detailed descriptions. There is no worse feeling than discovering an automatic was marked as a manual on Day 60. And those units have to be priced competitively. Do you need to be the cheapest? No. You need to be in the ballpark.
5. Use Your Head.
There are a ton of used-car tools available, but don’t forget they are only tools — nothing more, nothing less. A hammer can be used to destroy or build, and used-car tools are no different. Use your head. Understand when you have a car that is special, and understand when you just have a car. Price and market accordingly.
6. Fix Mistakes Fast.
If you overbid a car, either correct the bid or liquidate it — fast! Whether you spiff it or roll it into the showroom, do not let it linger, because its prospects will not improve. Speed is of the essence.
Let’s take this opportunity to get serious about used cars. Get your managers and employees onboard and keep them focused. In good times and bad, a well-run used-vehicle department will pay dividends for everyone.