How can car dealerships best maintain profit in today’s environment with low new car inventory and high demand for used vehicles? Randy Kobat, Vice President of Operations for Inventory Management Solutions at Cox Automotive, answers this question and more on today’s show.
Kobat begins the conversation by discussing how car dealerships are handling drastic shifts in available inventory. Kobat believes that car dealers need more inventory on the ground than they can sell in order to be successful. Car dealers are having record profits and they’ve been focused on appraisals and reconditioning.
Kobat adds that car dealers should be evaluating their appraisal processes. Every car dealership needs a consistent and logical process when it comes to appraising. In order to get used vehicles ready for customers, Kobat says it’s crucial to move cars quickly through acquisition and get them front-line ready as fast as possible. Start the reconditioning right then and there during the appraisal process. It’s also important to prioritize reconditioning based on the profit potential of the used vehicle.
Kobat wraps up the conversation by sharing the ingredients that will help a car dealer run more effectively and efficiently. One of the best practices for car dealerships is transparency. Secondly, understanding the cost estimation around reconditioning, is equally important, says Kobat. He encourages car dealers to use photos, descriptions, and comments, so they can more accurately estimate the cost of getting a used vehicle front line ready.
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