What does it take to succeed in the used car business these days? How do you even define success. Is it based on profit per unit, or profit per a given period. Is it growth in market share and if so then how much growth? These are questions all dealers, buyers, and remarketing managers should be asking...and defining.
Last month, we took to the airwaves with a few dealership partners to explore these ideas and see how they themselves are embracing change within their used car departments. These partners included Aaron Gomez of Epic Auto Sales and Gary Wade of Morrie's Auto Group who sat alongside me and V.A.N. Founder Tom Gregg in our session, "Buying Used Cars from Private Sellers."
Offer Great Value to Customers Off the Street
One of the things Aaron talked about in our interview with him earlier this year was offering "great value" to customers off the street:
The wholesale market is completely different from the way it was even just a few years back. We are seeing dealers unable to acquire all the used vehicles they need from the auctions. One of the more effective ways for us to provide our dealers with the vehicles they need is to offer great value to customers off the street.
As an example, because Epic is a wholesaler, Aaron and his team can take a proactive approach to locating vehicles off the street that their dealers are struggling to find, and then work with those private sellers in a friendly transparent fashion to help meet their unique needs. This might include offering them slightly more for their vehicles than they are being offered elsewhere, and being able to lower the price on retail units that interest them. "It can be a win-win for everybody," Aaron says.
Many dealers are reluctant to change their approach and focus on establishing (and growing) a high-profit used car buy center. Unfortunately for them, these dealers will be left behind. There's a fundamental shift in the used car business - Buying used cars from consumers is more profitable.
Four Elements Video
The four elements to running a more profitable buy center include:
People
Attitude
Patience
Process
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