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How to boost your dealership’s used car sales when new car supply is low

Automakers continue to face manufacturing challenges as supply chain issues persist. In light of this lack of new vehicle inventory, many car dealers are turning their attention to their used car departments. Joining Jim Fitzpatrick on today’s edition of Inside Automotive is Sean Gardner, who discusses the best strategies for selling used cars. Sean is an Instructor and Sales Trainer with the Joe Verde Group, one of the leading training organizations for car dealers, managers, and salespeople, for over 35 years. 

At a recent workshop in Buffalo, New York, Gardner says many car dealers reported that they don’t have enough cars on their lots to sell right now. One dealer in attendance who owns a Toyota store said he had four or five new vehicles on hand and around 50 pre-owned vehicles on his lot. This store is one of 11 in the entire group, and collectively, the stores had about 600 pre-owned vehicles. The group also allows its salespeople to cross-sell, which is crucial, says Gardner. Many salespeople believe it is too much trouble to cross-sell or that the process is too uncomfortable. However, this dealer group has individuals selling 40-50 cars monthly by cross-selling. 

“If we don’t have the new vehicles on the lot ready to sell, then we need to do a better job of giving the customer options and choices of buying the pre-owned cars that we do have on the lots right now,” explains Gardner.

The current market conditions force car dealers to be more creative in managing their inventories. But some customers won’t wait weeks or months for their vehicle. That’s why it’s vital for salespeople present customers with pre-owned options. Gardner says that new car-focused salespeople tend to forget the benefits of a customer choosing a pre-owned vehicle. If a customer goes the pre-owned route, they avoid the level of depreciation new car owners face as soon as they drive off the lot. Pre-owned customers can also often find vehicles with more features at better prices than they originally had in mind. 

Elevated prices for both new and used cars can frustrate some customers, and salespeople might be unsure how to handle the situation. Gardner says salespeople must present those numbers to customers professionally and explain them in a way that makes sense to the customer. Salespeople are frustrated by this process too, but you don’t have to be an economist to explain the inflationary market. Joe Verde Group teaches salespeople to set aside price and focus on creating exceptional buying experiences. 

“It’s not about getting frustrated with the market we’re in. It’s more about sharpening up our skills so that we can help more customers, have more fun, make the customer experience phenomenal, but also sell more cars, hold more gross, and make more money,” says Gardner.

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