Most important aspect to buying vehicles from individuals
The used car market is off to a good start in 2021. TrueCar estimated in its forecast last week that there will be 3.2 million used-car sales this month. That would beat January 2020 by 1% and December by 10%.
Market values are also going up for used vehicles. For the week ending Jan. 17, wholesale prices climbed 0.5%, according to a J.D. Power report.
That report indicates there hasn't been this deep a run of weekly hikes in values since August. Compared to early March, auction prices are up 5%. Against where they fell to in April, they have bounced back by 23%.
With wholesale prices on the rise your margins will pinch, especially since vehicle supply could keep retail prices at bay. How you fill your lots this Spring and at what cost will continue to be a priority.
Private Party Acquisitions
Sourcing used from private party sellers continues to prove the most profitable for savvy dealers. Unlike dealer auctions, you are able to get your hands on more rare and unique finds, often in good ownership hands, and you avoid the fees and surcharges.
Not to mention that fact that when you buy an individual’s car, regardless of whether they buy from you, that’s a new CUSTOMER.
What is the most important aspect to buying from private party sellers?
When asked what the most important aspect to buying vehicles from private party sellers, Aaron Gomez from ProSale Nation in Houston says, “There is nothing to hide about acquisitions. Whether you're working for a dealership or you’re not, the most basic element is the human element. You're just reaching out to someone and making a deal.”
What Aaron means by this is that it doesn’t have to be a game. Honesty and transparency go a long way with individual sellers. And even though people don’t always want to bring their vehicle in for an evaluation, doesn’t mean they aren’t motivated to sell.
“Just like a car sale,” he explains, “you sell yourself, you sell your process, and then you acquire a vehicle.”
Sounds simple enough, and for Aaron it might be. But that doesn’t mean he isn’t faced with challenges. People don’t respond and people object and are hesitant. No buyer can control what people think or how they feel about.
Which is why you must remind yourself to always try and relate to the seller’s point of view and not over-complicate things. “We can over-complicate this a thousand times over but at the end of the day you're paying for a commodity. That's all it is,” he says.
Check out the VAN Learning Center Today
This video excerpt comes one of our VAN University webinars held every month that you can participate in absolutely free by going enrolling in the VAN Learning Center.
Become a more efficient and more profitable used car business with other VAN University members today!