09 Jun The Keys To Acquiring Pre-Owned Vehicles In The US Car Market
Since April 2020, the cost of a used vehicle has gone up over 20%, making the US used car market hot. Unless you’ve been hiding under a rock, you’re aware that much of that can be attributed to the chip shortage and the overall disruption to the supply chain. Shoppers looking to sell their cars may be looking for tips on how to sell their used car for the top dollar but that’s where dealerships can step in and tap into this opportunity.
Think about it, shoppers will be selling their cars but they also will need to replace it with a newer model or a different type of vehicle. Dealerships need to be a resource for the shopper when they sell their car because their trade can help them offset the price of a new vehicle and help you build up your inventory.
In this blog post we’ll provide car salesmen and managers 3 tips that you can use to increase your pre-owned inventory:
- Ask your shoppers if they have a car to trade in. Every car dealership should be focused on acquiring more trades, regardless if the shopper ends up buying a vehicle from you. After all, it’s going to be much more cost effective than buying from auction. To that end, you should be asking the shopper about their trade on every new and used car inquiry and letting them know that regardless if they purchase a car from you, you would be happy to write them a check for their used vehicle that they can use anywhere they choose.We mystery shop a lot of dealerships and very rarely does the salesperson ask about the trade. When we bring it up to them, the salesperson often generates little enthusiasm for the car or indicates that the shopper can sell it on their own for more money. The only time they say anything favorable about the trade is when they mention the tax benefit of selling through the dealership. Apparently that was in some car selling course back in the day and it stuck. However, that only applies if they buy a car at the same time and we already established that you’d want to buy their trade regardless of if they buy a car from you. Using the tax deduction as the only benefit, sets yourself up for failure if they don’t choose to buy from you.Now, don’t be fooled, shoppers today are savvy and they know that they can get more money selling their car in the second hand market to a private party through craigslist or their local resources. As a salesperson, you need to educate them on the benefits of getting their car appraised through the dealership and provide them with a morsel of hope that they’ll get the best deal from your dealership. It’s ok to let them know of the inventory shortage that all dealerships are facing and because of that you are able to offer them significantly more for their trade. It would be a welcome change for them to hear some enthusiasm for their vehicle.
- Use your service drive as your auction lane. Cars that are serviced by your dealership are of utmost value to you. Afterall, you know the history and can rest assured that the repairs were done to your specifications and standards. For these reasons it’s important that you have a process for dedicated sales associates to sell out of your service drive.While the process may vary amongst dealerships, doing the initial research the day before is one constant that will set your team up for success. Once you know who is coming in and which cars you’ll want to target, you can create a game plan to acquire the vehicle. Oftentimes you will need to be creative and adjust your strategy based on the client’s behavior or individual situation. For example, are they staying at the dealership, do they leave in a rental car or do they leave without you seeing them? Whatever path they take through service, your team should be set up with a process to present them with the opportunity to have their vehicle appraised so that they can see what options are available. For example, what better time to present the opportunity when a service customer picks up a loaner car? They should be put in an upgraded version of their vehicle and when they get the keys the associate should show them all the bells and whistles on the vehicle that they don’t have on their older model. With their permission, you can appraise their vehicle while in service and when they drop off the rental you present them with the opportunity. Boom!
- Leverage your database for opportunities. Every salesperson should be making calls to their sold customers on a regular basis and at specific times in their ownership, presenting them with the opportunity to trade in their vehicle for a newer or different model. The important thing is that you’re reaching out to the shopper before they’re in the market for a vehicle – that way they haven’t had a chance to shop other dealerships and yours will hopefully be the first and the last one they visit. You won’t strike gold every time but by keeping top of mind with your sold customers, you will be the first one they think of when they’re in the market to buy a car.What happens if you’re new to automotive sales and you don’t have a large client
pool? In this case you should ask your managers for orphan owners who are past customers whose salesperson left the dealership. You can then reach out and introduce yourself to them and continue to reach out to them with a regular cadence.Yes, this strategy is a long game and takes a lot of effort to be following up in what may seem to be a futile effort. Having a farmer mentality is what makes a good salesperson a great salesperson and with sold clients closing at a rate upwards of 70%, this is the kind of effort that pays off.
The used car market won’t be this constrained forever but these are the times that you should be focused on putting these winning strategies in place. When inventory opens up, you’ll be ahead of the pack and you will find that these tactics are more efficient then the traditional ways of gaining used inventory, like at auction. Schedule a demo to learn how we can help your dealership with the structure and processes they need to stay ahead of the competition.