Who’s Your Daddy or Mommy In Used Cars?
Due to a long-standing tradition of treating used vehicles alike—from the practice of applying standard, cost-up mark-ups to addressing age and pricing issues at standard intervals, many dealers are not giving sufficient, individualized attention to every used vehicle in their inventories.
This inattention appears to be most profound when it comes to pricing and repricing vehicles.
The other day, I worked with a Midwest dealer group where the Price to Market ratios actually increased as vehicles hit 15, 30 and 45 days in inventory. As many velocity dealers know, this is exactly the opposite strategy that should be employed to mitigate the risks of age and depreciation.
After some discussion, it became clear that the managers across the dealer group weren’t familiar with the techniques, tools and processes that enable them to pay greater attention to each vehicle’s current market position and listen close to the clues each vehicle relays as a retail unit on the physical and virtual front lines.
Some used vehicles are more popular than others, and get lots of attention from consumers. From a parenting perspective, these used vehicles are like children who are easy to manage and need little guidance to get along well in school and their other activities.
Other used vehicles, however, are more challenged. They’re less popular with consumers, and may have some attributes that make them especially unappealing. From a parenting perspective, these vehicles require a greater degree of attention, input and oversight to ensure a positive outcome.
The good news is that dealers now have technology and tools that help them become better parents of their used vehicles. On a daily basis, dealers can tell how their used vehicles are doing via the Search Results Page (SRP) and Vehicle Details Page (VDP) tallies they achieve.
Of course, it’s the dealer’s responsibility, as a parent, to listen to these indicators as early and often as possible and make the necessary adjustments (e.g., merchandising and pricing) to ensure every used vehicle has the best opportunity to succeed.
All this leads to a question: Who’s your Daddy or Mommy in used cars?