ASLEEP AT THE WHEEL
It is time to get a grip on your used car department. I see used car departments adrift with no one at the wheel. Who is in charge of the used inventory from acquisition to delivery at your dealership? Are they equipped and authorized to properly acquire, ship, recon, market, price and sell those vehicles? Many dealers do not provide their used car manager with the tools and knowledge to be able to effectively manage their used car department. This article will help you create a used car process from acquisition to delivery that will get your used car department turning vehicles quickly with maximum profit.
Step one is to get your used car team assembled and identify job roles and time frame expectations for getting the vehicles through each step in the process. There must be a leader of this group. It could be used car manager, general sales manager or owner. Someone with authority to make things happen at the dealership. That person must be involved in the daily operation of the used car department. They must be able to influence all other members of the team . Used cars need special treatment in your dealership. They must have front of the line attention from service and detail departments. Service manager and detail manager must be aware of recon time in shop and have clear goals to meet. Other members of the team must include an emarketing person who will take pictures and post them to vehicles. That person will also ensure proper online visibility of all vehicles on all sites. They will work closely with the used car manager to ensure proper pricing and equipment on each vehicle.
Step two is to have a clear plan for each department for getting used cars through the process and ready for sale. The clock starts when the vehicle is delivered. The process must fire as soon as possible. The used car manager must have the vehicle cleaned for pictures immediately. The detail department does not do a full detail at this point. You just need it good enough for pictures. The vehicle may be clean enough for pics at delivery. Have the writing and stickers removed from windows and let the emarketing manager take pictures and post them online. The vehicles must be priced immediately. The goal is to have the vehicle pictured and priced online within 24 hours from purchase. The used car manager must notify the service department immediately that the vehicle has arrived. The service manager or writer must write up and dispatch service RO immediately. This is the first choke point in the process. You must give your used cars front of the line attention in the service department. Your used car department is your largest customer in service. It spends more money than anyone else. It should get preferred treatment. Hire dedicated techs if necessary. The vehicles must be through service in 24 hours from delivery on average. The detail department must turn the vehicle in 24 hours from time give to them. This is the second choke point in the process. You must control the detail process or your vehicles. Have multiple sources for getting your vehicles detailed. Having a full time detail department on site is the best option. Have a local detail shop for a back up when there is a back up. I suggest having a second shift detail crew that details after hours. Having detail workers that are flexible is a huge benefit to dealers. Find people who are willing to be "on call" for second shift detail work. Used car manager must be accountable to schedule detail after hours detail workers.
Step three is to ensure a proper pricing policy for your vehicles. You must have a pricing tool to be effective in turning used cars quickly. I am a Vauto user and suggest them to anyone who does not have a pricing tool. The bottom line is that not all cars are the same. Some are fast turning cars and some are not. The key to turning all cars quickly is to be able to identify the market day supply of the cars. Market day supply is simply how many cars are available verses how many people are buying them. A high day supply car may mean that there are many cars like it for sale now in the market. To sell a high day supply car you need to price it aggressively compared to the market average. A low day supply car means that there is a high demand and a low supply. These cars have more people looking for them than there are available for sale. You should be able to ask for a higher price to market for these type of vehicles. This is where the pricing tool comes in. If you cannot identify the day supply of a vehicle, you cannot price it accordingly. If you could identify it as a high or low day supply vehicle, you could not tell what the market average is for the vehicle to price it accordingly. This is the third choke point in the used car process. Many dealers will mark up the vehicles and hope to land a customer on the vehicle who will like it enough to not care about the price compared to similar vehicles in the market. Customers like this are a dying breed. 8 out of 10 customers who buy a car today start their shopping online. There is no place to hide online. Shoppers can compare your vehicle to many like it on the same page of sites like cars.com and autotrader.com. Your price is visible for all to see compared to many just like it. You will not get customers clicking on your vehicle if it is much higher than similar vehicles. I believe customers view cars online like gas stations on 4 corners of an intersection. I know that if 4 gas stations sell gas for $3.29, $3.49, $3.49 and $3.49 the station selling for $3.29 will be selling more gas. Price sells cars online. This is where we are. Get used to it. Customers are going to make a buying decision before they see the car in person. Today's car buyers are visiting less than 2 dealers in person before they buy a car. That means your online visibility is going to be the major purchase influence to 8 out of 10 cars you sell. You showroom is no longer the high traffic area for potential customers.
If you follow these steps in your used car department, you will have a vehicle that is quick to online visibility and priced to sell quickly. Your goal should be to have a retail sales average of 17 days in stock prior to sale. That would turn your inventory 21.5 times a year and lift profit throughout the dealership. These are very important steps in getting your vehicles ready for sale fast. It still does not solve the entire used car department equation. Which cars should I buy? How should I price them? How long should I keep them? Where should I buy them? These are other questions that need addressed. That will come in the next blog installment.
You can visit my website for more information on turning used cars quickly at www.30daycars.com
I am happy to talk to dealers, used car managers, general sales managers or owners who have questions about how to create a fast turning used car department. Feel free to call me at (812)972-3234.
Robert Coleman
Founder 30DAYCARS.COM
robertcoleman@30daycars.com
www.30daycars.com
(812)972-3234
www.facebook/30DAYCARS.COM
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