They say time waits for no one, and he who hesitates is lost.

Well, those may be true, but it’s also true that speed kills. The faster you go, the less control you have and the more prone you are to mistakes.

This is especially true in the car business.

Dealers often make the mistake of thinking they make their money when they sell their vehicles. The truth is, they create the opportunity to make or lose money when they acquire inventory.

The correct answer is to spend more time where you’re making money and less time where you’re losing money. You make money when you have a plan for every piece of inventory you trade for before you trade for it.

The most successful dealers assume every vehicle to be a retail piece until proven otherwise. Why is that the case? Because when you think retail-first you’re willing to step up for your best retail inventory, which are trades. According to a NADA 2023 report. 67% of what actually sold in 2023 were trades and only 33% were purchases. At the same time, 66% of what was in stock on any given day were purchases and only 34% were trades.

As dealers, you need to make sure you’re looking at every opportunity to step up your trade in opportunities and maximize your “look to book.” When you trade for a vehicle, you need to make every effort to turn it into a retail piece of inventory.

When you’re short on inventory, don’t be so quick to rely on the short-term solution of a quick fix with outside purchases; rather, take your time and look inside first. Your highest ROI inventory sources are:

  • Trades: A 2-for-1 because we sold a car
  • Service department: Homegrown; Our best customers, one-owners, well-maintained
  • Lease returns: Perfect CPO inventory

The most important time is the time spent writing a quality description that sets your vehicle apart. It helps you find the right buyer and allows you to ask for the right retail value.

Remember to STOP:

Using VIN-populated descriptions.

  • Every customer knows the vehicles today come with power windows, power locks, tilt steering wheel and air conditioning.
  • No two used vehicles are the same.
  • Detail the vehicle’s unique history.

Pricing every vehicle with a market average based on year, make, model and miles.

  • Understand why your vehicle is worth or more or less than market
  • Priced to low-cost your profit, priced to high-cost your added age.

Again, spend more time where you’re making money, and less time where you are losing money.

–Just The Fax

By Robert Grill, Carfax Senior Partner Development Manager

Read Just The Fax on Auto Remarketing | Follow Our Podcast | Email Bob Grill