For many franchised car dealers, the used car department significantly contributes to the bottom line. These sales are even more fundamental to independent automotive retailers. But there’s more to success than moving second-hand metal, especially when used cars are in demand. Let’s explore what used car managers and salespeople need to consider for next-level results.
1. Inventory management
The foundation for successful used car sales lies in on-target sourcing and inventory management. It’s a careful balance that depends on catering to local demands that can ebb and flow like the tide. This begins with thorough research to gain insights into your area’s most popular models, configurations, mileage ranges, and price points. Variety is essential, as is maintaining a healthy mix of CPO and non-certified vehicles.
It’s all designed to appeal to diverse budgets and ensure regular turnover. This delicate dance reflects having an in-demand selection without overstocking. The solution comes from leveraging sales data and analytics to optimize your inventory acquisition and management strategies.
2. Vehicle certification and warranty
Offering certified pre-owned (CPO) vehicles can provide buyers with added peace of mind thanks to extended manufacturer-backed warranties and rigorous inspections. This perceived added value often makes customers more comfortable selecting a used car instead of something new. It’s an approach that’s particularly helpful when purchasing power has been impacted by inflation and increased borrowing costs. Independent dealers can still self-certify and add a warranty on qualifying vehicles to boost sales.
3. Transparent pricing
The days of used car price shell games are over—consumers expect pricing to be transparent. They have readily available information at their fingertips to make subterfuge ineffective. Promoting an attractive asking price that is actually much higher erodes trust and will drive your prospects elsewhere. Instead, ensure your pricing is competitive with other local dealers and clearly breaks out the sales price, fees, taxes, and any optional add-ons. Being upfront on pricing lets the conversation focus on the car, not the bottom line.
4. Vehicle presentation
The adage “first impressions are lasting ones” is especially true with used car sales. Not only must each vehicle be detailed to perfection, but the showroom and retail lot must also be presentable. Buyers will pick up on uncleanliness as a reflection of your inventory’s quality. And better-looking cars command higher prices. But there’s more to selling pre-owned vehicles than appearance; every car has to be in good operating condition. This means batteries are charged, and lights, windows, and electronics are working.
5. Digital presence
A good in-person presentation for your dealership and its inventory has to be supported by a high-quality website and effective online listings; your virtual showroom Invest in professional photography and videography to showcase used models. Include ample exterior and interior images from multiple angles and take advantage of walkaround and start-up videos. These efforts show you’ve got nothing to hide.
Detailed descriptions are also a must. Provide key specs, options, condition information, and vehicle history data. It’s an approach that coincides with consumer demand for transparency. At the same time, ensure your website is mobile-friendly, with tools for payment, financing, trade-ins, and appointment booking. Your inventory should also be listed on leading third-party car sites.
6. Financing options
According to Experian, about 55% of used car buyers finance their purchases. If you’re not maximizing this opportunity, you’re leaving money on the table. Offering flexible and competitive financing makes buying more accessible for prime and subprime borrowers. These steps include providing easy online loan pre-approvals and payment estimation tools. Also, ensure your sales and F&I teams work together to offer customer-focused financing.
7. Customer reviews and testimonials
In the digital age, customer reviews and testimonials significantly influence buying decisions, especially for major purchases like automobiles. Satisfied buyers are more inclined to leave positive public feedback when asked, so don’t hesitate to seek these recommendations. Publishing these endorsements on your website, social media channels, and third-party review sites is just a starting point. Consider using video testimonials for greater impact.
8. Staff training
Your used car sales team needs continuous training to succeed in this fast-paced marketplace. Not only does your staff need to be up to speed with the latest sales strategies and techniques, but they also need a base level of product knowledge, which can be challenging when selling unfamiliar brands. Nothing turns a buyer off like a salesperson fuddling around with a car’s equipment or not understanding how features work.
9. After-sales service
Your work doesn’t stop once the buyer drives off the lot. Providing an excellent ownership experience through your service department helps foster loyalty and referrals. Used car buyers may be more price-conscious yet still value a strong service relationship. Set up a personalized communication process for post-sale follow-up; include competitive maintenance and service offerings in these messages.