Used cars are an automotive dealer’s lifeblood and competition for stock is fiercer than ever. With the stakes so high, you have to sharpen your process of sourcing and selling second-hand vehicles. Our seven tips will help you do just that.
1. Identify the best-selling stock
It’s said that knowledge is power—while every dealer knows their market, the more information you have about the popularity of your stock, the better your chances of selling it quickly and for a strong price.
This is where the CarGurus Market Analysis Tool is very useful. It gives you a granular breakdown of the vehicles getting the most views and leads, along with details about which models are attracting the most attention in your local area.
2. Broaden your stock sources
Sourcing quality stock has been an issue since the dawn of used cars, but it’s getting even tougher. More than 80% of dealers surveyed in our One Voice report told us that finding vehicles in the right condition and at the right price was proving increasingly difficult, causing many to seek out new ways of sniffing them out.
Standard-issue auctions are not a bad start, but dealers have told us they are making more use of part-exchanges and even buying used cars directly from private sellers in order to bump up their stock levels, both to good effect.
3. Se the right price
Getting hold of stock is half the battle; the other half is what you do with it when you have it. Accurate pricing is the holy grail of selling used cars—the balance of a sufficiently attractive sticker price to lure in buyers, complete with a healthy layer of profit, but that’s easier said than done.
Once again, data is your friend. The CarGurus Used Car Price Trends tool tracks the prices of millions of used car listings every year to give you the best idea of what’s selling and for how much, so you can set your values accordingly. What’s more, the Market Analysis tool also explains how much you should be paying for a car at auction, which is invaluable for up-front budgeting.
4. Create a vehicle inspection process
The faster you turn your stock, the greater your profits, so it’s easy to focus on speed above all else. But that shouldn’t come at the expense of the basics. It’s vital to have a watertight inspection process to establish whether or not a used vehicle matches the seller’s description and if it needs any further work. A brief layer of quality control doesn’t take long, but it does make all the difference to the car’s presentation and whether or not a customer will look twice.
5. Dedicate staff to reconditioning
We’ve already stressed the need for speed and the same applies to reconditioning work. Remedial repairs for recently acquired used stock can fall down the agenda when technicians are busy with servicing and other repairs, and before you know it, there’s a backlog of cars in desperate need of work before they can hit the forecourt.
If you find the refurbishment process is taking too long, allocate technicians to that specific duty. Efficient larger used car supermarkets and groups even have specific premises and teams dedicated to the task. It’s a more organised approach to repairs and ensures the unimpeded flow of used cars onto the forecourt.
6. Create staff incentives
Sales executives are no strangers to commission-based earnings, but there’s no reason not to roll out additional incentive programmes, especially to non-sales staff involved in the used car stocking process.
Aforementioned technicians, for example, could receive a small financial reward or voucher if they refurbish a certain number of cars within a predetermined period. Assuming they’re not already working on commission, consider a similar scheme for those in charge of sourcing stock if they’re regularly netting quality used cars.
7. Location, location, location
It isn’t exactly digital-age stuff, but a prominent position on the forecourt is bound to get a car more attention from walk-in visitors and passersby than when it’s shrouded by other vehicles.
As always, you have to find a balance. You want the highest quality, most desirable stock in a prime spot, but at the same time, hiding something that’s been around a little longer and proving harder to shift won’t get it sold. The best option is to rotate the stock as frequently as possible and display a mixture of vehicles at the front, which has the supplementary benefit of freshening your forecourt.