Sounds like a no-brainer, right? Yet dealers across the country are still making decisions that result in thousands of dollars in wholesale losses annually. It’s an endless cycle, which – without true process change – leaves dealers with no other option than to continue to incur these losses. From the appraisal process to vehicle disposal, dealers should consider a variety of factors to make sure they are making the most profitable decisions. Better, knowledge-backed decisions equal increased wholesale performance.
The decisions made around vehicle appraisals are of primary importance. When a customer brings a vehicle to your lot for trade-in, you should be able to instantly determine how that vehicle has traditionally performed in your dealership and sister stores. Having this knowledge helps you to price the vehicle at the “right” price. If you know the vehicle hasn’t performed well on your lot, but has performed well at a sister lot, you can decide to place that vehicle on the lot where it will make the most money and turn in the quickest time.
Decisions concerning the vehicles purchased at auction are also critical. All too often, buyers get distracted by vehicles that they have a “gut feeling” will do well on your lot. They invest your dollars in vehicles that end up sitting for too long. Imagine the benefits of having a “grocery list” that your used car manager can take to the auction and use to bid on vehicles they know have performed well and aid in building the ideal inventory mix for your store, or even at a sister store.
The ability to identify vehicles that perform well at your sister stores – in addition to knowing what performs well at your store – allows you to reap the numerous benefits of group trading. Group trading can result in less time spent at the auction and increases the number of core vehicles on your lot and all lots within your group – leading to increased sales and gross, tighter inventory across lots and less wholesale and aging problems.
Having a plan of action for each vehicle from day one allows you to cut ties sooner on vehicles that traditionally haven’t performed well for you. Having data that can tell you where you’re apt to make the most money is very powerful. It gives you the ability to buy the right vehicles – at the right price – and at the right time. So, how do you accomplish all of this?
It’s a combination of process improvements paired with the utilization of technology that is available today to help dealers make knowledge-backed decisions. The process changes involved require streamlining of the appraisal and vehicle purchase and disposal processes. The technology part of this equation is equally important. Systems are available today that can take your store’s sales history (and your group’s), combine it with local and regional market data and literally provide “buy/sell” recommendations. Extensive reporting such as water and aging reports can assist you in developing a plan of action that ultimately optimizes your inventory – reducing turn times and wholesale losses, while positively impacting your bottom line!
Vol 3, Issue 6
