New Car Leads Closing % vs Used Car Leads Closing %

Craig Waikem
At our dealership we are experiencing a significantly higher closing ratio on our new vehicles vs used vehicles leads. They both have a similar percentage of appt set and appt show, but the showrooms are closing about 20% less on used vehicle customers. We close 13% on new vehicle leads under 60 days, but only 8% on used vehicle leads under 60 days. More importantly we close 60% when the new vehicle customer shows, and only 41% when the used vehicle customer shows. I was wondering if this is common, or is something breaking down in our showrooms (quality of used vehicles, financing, etc). I really do not think its an internet process problem, because we are getting the same percentage of appts set, and show, just a much lower closing percentage once they hit the floor. This maybe common, or it may not. Feedback is appreciated.
Jim Bell
Obviously, the key is getting them in the door since you have a higher close rate when they are there. We see similar numbers here at our dealership. The used car buyer has soooo many options out there and I think that may be why. We all have to find that hook to get them in the door so you can close at that 40%+ when they get there. The new car buyer seems to take their time since it is more of a want than a need, therefore the lower close rate on the 60 day or less. The key is nurturing those leads longer and not give up. Keep on plugging away!
Dennis Galbraith
Great post Craig! As important as close rates are, it is also important to see which vehicles those leads are coming in on. Sometimes a store will receive an abundance of leads on vehicles that are hot sellers. Provided you have the vehicles in sufficient stock, this can result in a fantastic close rate. Getting more leads per vehicle on slower moving vehicles may reduce the close ratio, but may be just what the store needs to turn hard-to-move inventory. Sometimes it is appropriate to expand the range for leads procurement for models that are hard to move and/or contract a bit for those that will sell quickly anyway. Traditionally, used-vehicle leads have closed at a higher rate than new-vehicle leads. The J.D. Power study on Dealer Satisfaction with Online Buying Services no longer exists, but showed this consistently for years. That said, results varied from store to store. Additionally the new-vehicle market has changed considerably with capacity changes and the tsunami. Like you, I am puzzled by the impact of these things on close ratios. There is a case to be made that the documentation requirements for demonstrating value are much higher for used vehicles than for new. That might be the first process point to check with respect to used-vehicle sales.
Jeremy Alicandri
In my experience, the used car closing numbers are directly related to the velocity pricing/processes.

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