The coronavirus pandemic and resulting economic crisis have created a used car shortage in many parts of the United States. Demand is growing and supply is limited. So, what are preowned car dealers to do to keep their lots stocked? Here are our top tips for increasing your inventory of quality used vehicles.
1. Skip the auctions.
If your operation is experiencing a used car shortage, it’s likely your direct competitors are, as well. That’s why it might make sense to skip your local car auctions right now. You’ll find yourself bidding against each other for the same vehicles, increasing prices and reducing margins.
Instead, go right to the source and find ways to buy used cars direct from owners. During competitive times like these, it’s a better way to find deals that are likely to turn a profit.
2. Create a dedicated buying center.
Carve out an area in your dealership for a used vehicle buying center. Add some signage visible from the road that makes it clear your business specializes in purchasing preowned cars. It makes it more likely that people who want to unload their vehicles will think of you when it comes time.
Leverage simple and cost-effective means, such as social and digital advertising, to get the word out that you want to buy autos. Many people have unused transportation sitting in their garages collecting dust. This is especially true when more people are working from home and no longer commuting to work. All they may need is a reminder that they could turn their underused cars into cash. This message could resonate with many during this period of high unemployment and job insecurity.
4. Be visible to active sellers.
Selling a car isn’t something people do every day. Most search online to figure out how to do it. Is your dealership one of the options that will show up in their search results? If not, it should be! Take advantage of Google Ads to make sure active sellers know you want and value their business. Google offers many tools to help you build an effective ad campaign, or you can turn to an expert to help you get started. The investment will be worth it.
5. Transform service appointments into buying opportunities.
Does your dealership repair vehicles? If so, your service center could be a good source of vehicle inventory. Train the people on your service team to look out for customers who might be open to selling or flipping a car rather than paying for costly repairs. They may be willing to make a deal that could allow you enough margin to complete the work while still earning a profit when you sell the vehicle.
6. Hire the right people.
Used car salespeople are NOT created equal. Some are awesome sellers. Others are better at buying and trade-ins. Before you undertake an initiative to increase inventory, make sure you have the right talent to get the job done. If you don’t have enough buying pros on your team, it could be time to make some staffing changes.
7. Develop an efficient buying process.
Create a documented process that makes it quick and easy to give cash offers to everyone who wants to sell their vehicles. Make the experience collaborative. Involving the seller in the estimating process makes it more likely they’ll accept your initial offer.
Develop a deal closing process that’s as efficient as possible. You don’t want to have customers wait too long to complete paperwork, exchange documents and receive a check or cash transfer. Word will get around that your closing process is time consuming and tedious. Train the people on your team on the process and check in regularly to make sure it’s being carried out as intended.
8. Upgrade your technology.
The right systems and apps make the appraisal and deal closing experience fast and efficient. It takes the guesswork out of estimating vehicle value and eliminates cumbersome paperwork. Buying some tablets and smartphones and loading them up with the right apps could help turn your operation into a used vehicle buying powerhouse.
9. Make sure your turn-around process is ready for increased activity.
More cars means more work — for everybody. That includes the specialists who prepare used cars to hit the sales floor or appear on your website. Make sure your detailing and reconditioning teams know ahead of time you will be increasing buying activity. Staff up if needed. It doesn’t do much good to buy a load of awesome used cars if you can’t sell them in a timely manner.