Vehicles that look better sell better. But, as in most things, you may find yourself facing decisions on whether to focus on time, quality, or cost when it comes to reconditioning your trade-ins and auction purchases.
You aren’t interested in having your inventory sitting around while you put together a reconditioning team. But you also don’t want to move ahead at the cost of decreased retail pricing and lower profits.
These are a few ideas to streamline getting your used car inventory to the lot quickly.
Define the Current Market Demand
Due to chip shortages and the re-emergence of COVID in international markets, new cars and trucks are in short supply with plant closures, but the used car supply is growing. The positive news is that economic uncertainty is driving consumers to consider pre-owned vehicles. If you’re acquiring more pre-owned fleet models or your market is demanding more, it’s essential to turn your cars around quickly. But you’re going to need to survey what your market needs are.
Define Your Current Process
It doesn’t matter if it’s marketing, increasing sales closing, or reconditioning trade-ins. If you don’t have a process, it’s a guarantee you’ll take longer than you should. With your pre-owned vehicle holding costs heading up to $85, you want it moving as quickly as possible. And after 45 days, you’re losing profitability. After 45 days, do you have a plan? Many dealerships are using programs that provide rent-to-own models to help buyers get a car and move inventory. Having a defined strategy can maximize your process for reconditioning and inventory management.
Is There a Better Idea?
You have very intelligent, logical, and thought-provoking people working for you in all segments of your dealership. It’s time to get together with them and ask their opinion of the reconditioning process and how to do better. You may move people from one department to the other so they can better use their talents. Or maybe you shift resources from slow areas to the reconditioning process.
Get a Local Resource
You aren’t interested in having your inventory not hitting the lot but not at the cost of decreased retail sales and lower profits.
A local shop will give you everything from detailing to mechanical repairs. With the current increase in used car sales, it’s essential to turn your cars around quickly, and using an outside resource can be the ticket you need to profit.
Have the Auction Do It
Assuming your local auction isn’t closed because of COVID, and you don’t have the resources to do the work in-house or a consistent local resource, you may need to depend on the auction house. Many auction houses provide full-service on-site reconditioning services that can cut your time to market and save you money.
In the past, new car sales were the main focus, but this past year and current economic trends suggest that the strategy of selling new could use some change. With used car inventories that have better selection than the new car showroom, reworking your sales strategy could put you ahead of your competition. Having a strategy to get your newly inventoried pre-owned cars reconditioned and onto the lot can help you focus on profitable sales and be prepared for the changing auto industry.
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