With prices of late model used vehicles at a near all-time high, according to this latest article by Automotive News, one of the greatest challenges for used car managers is acquiring enough inventory to meet the current demand.
I’ve talked to used car managers who are traveling further distances, attending more auctions and paying more than they ever have before. Unfortunately, used car managers don’t have a lot of control in terms of what comes available at auctions and what the market demands they pay for good inventory.
What they do have control over, however, are the processes within the dealership that determine how leads for used cars are handled. Implementing the following best practices in the Internet Sales department may help alleviate some of the pain felt due to current lack of inventory:
Encourage Flexibility. As the Automotive News article states, when the price of a used car reaches 60% of a new car, often times the consumer will opt for a new car instead. So when an Internet leads comes in for a used vehicle and you don’t have the inventory to match it, highlight new vehicles in the same style and price—or even more important, payment—range, as the used vehicle requested. Expanding the selection of vehicles and providing side-by-side price comparisons may change the customer’s mind.
Actively Solicit Trade-ins. Tag every email correspondence to customers with an offer to buy their trade-in vehicle—whether they buy from you or not—to drive traffic into your showroom and help boost your inventory. If you use a trade-in tool on your website, such as Kelley Blue Book’s Lead Driver, aggressively pursue the vehicles that match your inventory needs, offering hope that what you will pay often exceeds the online estimates.
Don’t Give Up. Instead of closing out leads that you couldn’t help due to lack of inventory, start a “want list” of vehicles requested and provide it to the used car manager weekly.
Hold Firm on Prices. Used vehicles are turning quickly and hard to replace right now, which reduces the amount of potential substitute vehicles in the market and makes the ones you have even more valuable.
What other best practices do you recommend to address the used vehicle inventory shortage?