Used Car Dealer - Wanting to improve

Matthew D'Andrea

Let me first start by saying that I am still very new to this business.  Im 31, with no college education and self-taught on everything ive done in my life, so I know that I may not be doing things the "typical" way.  I just got into car sales back in 2010 and opened my own dealership with a partner exactly 2 years ago.  We started off tiny, with just paying for space as we sold cars.  6 months later we moved and opened a small lot doing strictly BHPH.  Once we realized that you need to have a very large piggy bank of capital, we quickly moved to Sub-Prime financing.  Exactly 1 year ago we moved to a larger lot, where we are currently.  It was a former New Car dealer back in the 90's and is plenty big enough for us to grow over the next 5-10 years and could potentially hold up to 150 cars+.  Right now we currently use floorplan for our vehicle purchasing, roughly $500k (which is very expensinve around 35% per year after fees/interest, but we dont have to put my house up as collateral)  We have anywhere from 55-60 cars up on the lot at any given time, 25-35 up front ready to go, 10-15 being recondition & another 10-15 pending funding at an average cost of $9000 per unit (2008-2014, 120k an less, etc).  We sell anywhere from 45-55 units per month, turning the 25-35 on the front lot almost twice.  We are making an average of $2100 gross per unit.  I spend roughly $15,000 per month on advertising (google adwords, facebook, website, craigslist, etc) and getting A LOT of traction.  We have a poorly made website from, and are receiving around 300-400 unique NEW vistors to the website per day per google analytics.  I have myself (Owner, GM, F&I,  Buyer of inventory) my partner (sales manager), 3 sales reps, and 1 internet sales person.  I know that with the customers im getting, I could sell upwards of 65-70 cars per month without have any more incremental overhead.  Im currently redoing my website with dealereprocess and should have that up and operational soon.  Right now were not pulling credit, just sending thru lenders via DealerTrack. The cost to pull a beareu report from what ive been told is $2.75 to 3.75 and thats a big expense as we normally get 15-20 apps in PER DAY.  Im currently setup with CAC, Westlake, Nicholas Financial, Gateway One, and CIG plus some others locally.  Its time consuming to send to lenders because of the various portals they have.  I just became a Presidential Dealer with Westlake and have a great track record.  Im having a hard time because I need some ideas of where I can make changes to increase our productivty or streamline our processes to make more money.  Im also trying to get a better type credit class of customer because I know there is money to be made.  Some deals I get between CAC & various Finance companies are around $3000, $4000 + but those are few and far between.  I know the saying is "you make your money when you buy the car" but I have to change some things to be able to get more profit.  Does anybody have any ideas or thoghts?

mark rask

How many leads is your internet person getting per month?

David Zotti

First, congrats on becoming self established, that's a huge accomplishment. 

Bringing in a better credit type of customer is based on the type of inventory you carry. Low mileage is key, 10-20k price range, 07+ trucks/SUV's do well, and luxury brands later than 06 do well too. 

As far as advertising, making the move away from a site is definitely a good move. Craigslist is pretty much always going to bring in poor credit buyers but its sales right? Being a used dealership, I don't think you need adwords, but make sure you're on every classified site. AutoTrader,, Cargurus, etc. With premium tier listings if you can make it work in your budget.  

Matthew D'Andrea

Mark, Were getting A LOT of leads, more than we can typically handle, even with 1 Internet Sales guy and 3 sales reps.  Im looking at setting up an internet marketing department with 1-2 reps + a manager to input apps, and manager them. We've gotten 525 Internet leads this month + phone calls & walk in traffic.  Google analytics have us at 7400 sessions & 5600 users this month to date.  David, thank you, I typically have 2008-2014 anywhere from 15k - 110k miles.  I keep some luxury brands, esp some SUVs on.  Weve recently been upgrading the external and internal look of the building.  Ive tried a few different sources of advertising like cargurus and didnt fair too well.  

Jamil The Carman

@Matthew IMPRESSIVE! the amount of leads you are getting is huge for the size of inventory you have ,You must be in a busy area .I am a used car dealer too I don't do subprime because my inventory is heavy on big trucks and jeeps so it's your choice (gross vs volume) with subprime you can do volume on the other hand prime deals are the ones with big dough .good luck with what you are doing 


Erica Sanchez

@Matthew Hello Matthew, I know that you came on here looking for advise on improving your business, but I actually have some questions for you on how you are getting some much traffic and leads to your dealership. My husband and I got into the used car business in 2014. It was all his idea and I went along with it. I’m 32 and he is 34 years old. He worked as an electrician and is basically a jack of all trades. We started our business in a startup location which we paid for 3 parking spots and an office surrounded by about 20 other dealerships in the building. Long story short we didn't know much about the business and everything we learned was from the Internet and asking other dealers for advice. We moved to a bigger location that fits about 25 vehicles and started acquiring our vehicle through a floor plan and started financing vehicles to our customers through Westlake. The problem we are having is getting leads! And more traffic into our dealership. You mentioned that you currently spend $15,000 a month on advertising, which is way out of our budget, but I was hoping if you could give me some pointers and advise on how to get leads, traffic and a better web presence.

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