The Auction: Don’t Choose the Wrong ‘Dating App’
The Auction: Don’t Choose the Wrong ‘Dating App’
Imagine acquiring private party vehicles similar to how you would choose a lifetime soulmate. Joe Webb, co-founder of DealerKnows and Writer and Director of the hit webisode series - The Auction, explains how!
“Going to a vehicle auction to buy cars is like trying to date someone from work as a future spouse” or a life partner explains Webb. “There’s a ton of guys there targeting that same person. You’re going to have to step up and woo that person.” Like a dating app, Webb claims, when you take a trade, the “customer has the say-so--swipe left, swipe right. They have their pick where they want to go as well.”
Webb continues, “VAN is like meeting a significant somebody through a friend. If VAN is your friend, you’ve already set the filters. VAN connects dealers with the right inventory, much the same way a friend connects you with (your soulmate) to weed out all the crowd and the muck. (The dating site) ‘Tinder’ would be the trade-in. Auctions would be meeting someone at work.”
“The Chip Shortage is Real”
Webb says it’s more important now than ever to make a connection and acquire as many used vehicles as possible. “There’s a massive chip shortage in obtaining inventory. Dealers are looking to supplement their new car inventory with used cars and they almost have to.”
“If you want to maintain a certain volume on your lot or volume of cars, cars beget leads; leads beget sales. The more cars you have, you are going to sell them,” Webb explains.
Webb says used car pricing has increased dramatically. “Last month there was a two-week span where used car prices went up 4.1%--one of the largest climbs in a two-week span in a decade or two.” Dealer’s are spending upwards of $3,000 more per used car. Gregg confirms a Cincinnati Dealer complained he only had a six-day supply of vehicles. “The chip shortage is real,” Gregg emphasizes. “It has made them better-used car operators.”
Consumers are happily paying the markup over ‘list,’ Gregg says--"One to two-thousand dollars. But that doesn’t make up for one-sixth of the supply of inventory. It doesn’t make up for the loss of revenue on the total volume. Getting better at (obtaining) used (vehicles) is a positive outcome.”
Recurring Auction Problems
The problem compounds itself when “everybody’s scrambling at the auction” says Webb. So, how does the average dealer acquire more high-quality used vehicles? “Sure, you can do a trade/buy-back campaign. You can cultivate business out of your service department. I encourage dealers to do all this,” regardless of whether there is an inventory shortage, he says.
Gregg adds, “Auctions elicit quick decisions, which may not always be well-thought-out.” The bidding price goes up…”At what point do you jump off?”
Webb says, “If you go to the auctions, you’re bidding on someone else’s hand-me-downs. You’re bidding against everybody in that lane, as well as online. Auctions come at an expense--there’s auction fees, insurance fees, location fees,” and the cost of transporting a buyer there.
“The beauty of VAN filters is you set your filters to only the vehicles you know you’re going to retail,” then you don’t waste unnecessary time and money on what Webb calls, “the dogs.” Webb adds, VAN’s platform, goes beyond what is expected, “because they ask for exclusivity, so you don’t have to bid against everybody else.”