Should dealers consider a separate digital retailing brand for their used car business?

What can dealerships do about OEM retailing? 

This may seem challenging, but with the right approach, selling used cars online can be a highly profitable endeavor. In fact, some experts like Brian Pasch believe that creating a separate digital retailing brand for used autos could be a game-changer for dealerships. Dealerships are being pushed around by OEMs and the efforts of large dealership groups like Lithia, who formed Driveway, show that it’s possible to fight back.  

Pasch recommends that dealers use Asbury Automotive Group and Sonic Automotive as examples of what can be done. Although there’s hope for legal protection against direct manufacturer sales, a different used car sales brand and platform may soon be the more profitable option. 

Does creating an online used car dealership brand make sense? 

There are several reasons why this strategy makes sense. First, dealers can better focus their digital marketing efforts on local used car shoppers. And, if new car sales distribution is going to change, dealerships will need to resize and rescale operations to keep their customers. 

By creating a separate website or online portal specifically for used cars, like Van Horn Automotive’s Shop CloudLot, dealers can ensure that their message reaches the right audience. And with the right tools and resources in place, they can also make the shopping and buying experience much smoother and more efficient for customers. 

Second, a dedicated digital retailing brand gives dealers more control over pricing and profits. In today’s highly competitive market, used car prices are often all over the place. By creating a separate brand, dealers can set their pricing strategy and ensure they make a healthy profit on every sale. 

Finally, a separate digital retailing brand can help dealers build a more loyal customer base. Customers who have a positive experience with a used car purchase are more likely to return in the future and recommend the dealership to friends and family.  

Is creating an online used car dealership worth it? 

Creating a separate digital retailing brand is not without its challenges. But perhaps the biggest challenge is simply getting started. 

Developing a new website or online portal, establishing a pricing strategy, and building a customer base all take time, effort, and money. But, with new car prices increasing beyond many consumers’ budgets, the investment in a used car dealership brand is well worth it for dealerships serious about capitalizing on the power of digital retailing.  

So, what do you think? Should car dealerships create a separate digital retailing brand for their used car business?