Tips on finding used cars
A Solution for Used Vehicle Sourcing Troubles
Chances are you’ve heard the following statements around your dealership, “I know we need vehicles but I can’t find them” and/or “We are going to have to over-pay to get them.”
Both statements ring true to a point. The market is certainly full of dealers looking for used vehicles to sustain their operations as trade-ins have thinned with diminished new vehicle sales. Meanwhile, local auctions are absolutely choked with frenetic potential buyers.
However, these are conditions of a volatile market, not proof of a vehicle shortage
In my view, the market has plenty of used vehicles. The problem is that many dealers and used vehicle managers are unaccustomed to or unwilling to step up and spend the extra time required to go beyond the “local and familiar” in order to acquire them. For years, dealers and used vehicle managers leaned heavily on trade-ins and one or two local auctions to stock their used vehicle inventories. For the most part, this system worked and most stores had the inventory they needed to do a good job. Today’s market conditions, however, have changed all that.
Today’s successful used vehicle managers (or their buyers) need to literally “cross the country” in order to find the vehicles they need. Some rely quite heavily on technology to do the job, spending hours in front of computers preparing buy lists and participating in virtual auctions. Some delegate this responsibility to recently hired inventory specialists. Others have launched “we’ll buy your car” campaigns with teams that make appraisal house calls. This is the kind of energy and attention that today’s market requires for sourcing used vehicles. Anything less is likely to result in the kind of frustrations earlier noted.
The Inventory Specialist-An Intriguing Idea
As I’ve listened to and thought about the approaches successful dealers and used vehicle managers have taken to addressing today’s sourcing challenges, there is an underlying theme-the work takes an inordinate amount of time. However, it can be done efficiently and successfully with the right tools: technology and discipline.
For many velocity dealers, the decision to hire, train and deploy inventory specialists has been a time and cost-saving winner. With a used vehicle manager’s oversight, this person can identify the right vehicles to purchase, the physical or virtual places to acquire them and the maximum price the store should pay for each unit.
This allows the used vehicle manager time to focus on ensuring efficient and effective processes for appraising, taking TOs, closing deals, reconditioning and other responsibilities that require a strong in-store presence. At these stores, the conversations on used vehicle sourcing are less about quantity than they are about how to acquire vehicles in the most efficient fashion.
While I like the idea of an inventory specialist, I am not advocating one for every dealership. If your store has recent visits to auctions that might best be described as “fishing trips” or “get a feel for the market” sessions, or where today’s able crop of tools and technology have not been fully deployed to most effectively and efficiently source used vehicles, you may have some work to do with your existing team and resources.
In any case, it is imperative that dealerships recognize the need for an increased commitment to properly sourcing vehicles. The current pressures on sourcing used vehicles will not go away anytime soon, if at all. In fact, I submit that it might get worse before it gets better, given the focus and urgency many dealers are placing on their used vehicle operations to keep their businesses afloat. Dealers who solve the used vehicle sourcing challenge will enjoy greater and potentially more long-term success than those who don’t. And those who do it most efficiently – that is, with the least cost to find, acquire, transport, recondition and retail the units – will be the biggest winners.