This title looks elementary and any seasoned Used Car Manager might dismiss reading through the article by just glancing at the top points below. While they may seem like common knowledge, we suggest deeper thinking with each because today’s used car market demands just that. The market itself has not been stable enough to decide on one strategy and go with it for a long period either. It looks like the volatility brought on by the pandemic and perpetuated by our current fiscal and political climate will keep us fighting off a tailspin for a few more years now. Let’s get and stay ahead early and often!
Now, that is not to say we can’t have fun, limit risk and grow. We can do all those things. However, it does mean we need to be diligent and surgical week to week. We can’t get lazy or distracted. Also, don’t mistake that to mean we need to be fickle and flip-flop week to week. That is nonsense. We simply need to monitor the trends and our performance in the most important operational KPIs weekly to either keep confirming we are on the right plan or foresee and prepare for a planned shift on the horizon. That is our core offering at The Automotive Advisor Team and here are a few of the things we recommend and can help you reveal and monitor to say ahead of the curve.
- Market Research: We all know it is important to understand your local market’s preferences and demands and all of us have the tools to research which types makes, and models of vehicles are currently in high demand. However, the data and the trends you track cannot be limited to automotive only as in the past. There are certain indicators that we watch outside of automotive that impact monthly retail success.
- Budget: Determining your budget for purchasing vehicles will help you narrow down your options and ensure you’re making profitable choices and reduce risk. However, average investment differs with nameplate and must be monitored by buying power, the current credit condition, and your rooftop’s success model.
- Source Reliable Suppliers: Technology is expanding our reach, but what is the best reach for your rooftop personally, nameplate, and market size/demographic? Establishing relationships with reputable dealerships, wholesalers, auctions, or private sellers who can provide you with quality vehicles at competitive prices is key.
- Inspect and Test: We can’t be sloppy here. Actual vs Appraised monitoring is a key metric to make sure you are on point. Don’t skip steps for speed to the front line. Thoroughly inspect each vehicle’s condition, history, and mileage and if unsure, get your mechanic’s evaluation to identify any potential issues.
- Popular Features: We know to look for vehicles with popular features and options that are in demand, such as advanced safety technology, fuel efficiency, and connectivity features. It’s the sales performic monitoring that is critical here. Make sure you know what color, trim, and pricepoint sell the fastest for you, with the best margins knowing this can change frequently. Don’t get complacent and just think what sold before will sell again.
- Repair and Upgrades: Consider vehicles that may need minor repairs or upgrades you can perform to increase their resale value. This seems simple but with the average used vehicle age being 13+ years and 16+-year-olds in higher numbers than ever, we have to consider buying deeper, adding more room in our recon budgets, and reselling vehicles we never considered selling before. The market is made so will you adapt?
- Competitive Pricing: This is a big one. Everyone says they price competitively but many have lagging indicators for their benchmark to adjust price. If prices for your vehicles are based on current market research and your average investment goals that is a good start but monitoring the daily and weekly success of vehicles that sell well allows you to adapt to the current market and maximize today’s profits.
- Marketing: This does not have to be about spending more money. You can easily develop effective marketing strategies to showcase your people, your culture, your community involvement, and the vehicles you have for sale. High-quality photos and detailed listings are essential but video walkarounds, vlogs, and video text messages from your people personally are much more effective. They will build a brand not only for your dealership but for people who are the keyholders of repeat and referred business.
- Customer Feedback: I don’t often see this one being done well. We have to create channels of transparent feedback to listen to customers and understand their preferences and adjust our buying and selling strategy accordingly. This will become more critical as EVs become more mainstream in the next few years. You can reach out to our team at www.beveveryeitng.com to find some resources for EV Retail.
Remember, successful vehicle buying requires a mix of research, intuition, and adaptability to changing market dynamics with strong parties who have lived through market choices and built strategies to hedge volatility to come out strong. The Automotive Advisor Team has done that and can help. Reach out for a deeper dive: email@example.com
John G. Ellis
Founder, The Automotive Advisor Team, LLC
Co-Founder, BEVEverything, Inc