1. Expand your geographic area when buying cars
The lack of used car inventory has motivated car dealers to expand their purchasing areas, buying one car at a time from anywhere in the country to fulfill their needs. In the past, car dealers might have bought multiple units at one local auction but now, they might buy one from Florida, another from New York, and then another in Michigan. This means dealers are placing more orders for single-unit moves. Until new vehicle production gets back on track, and to help avoid having low or no available inventory, dealers need to be willing to expand their geographic reach.
2. Forge transportation partnerships with companies that have a national footprint
If you’re going to scan the entire country for used vehicles, you need a reliable partner who can bring the cars to you. Not just that—they need to move one car at a time just as quickly as they move a full load of cars. Having a relationship with larger third-party logistics (3PL) transportation companies will only increase a dealer’s buying range and the speed with which they will have a car on the lot to sell. Additionally, you should choose to partner with a company with extended hours. When you’re shipping across time zones, increased customer service availability will be critical.
3. Explore the ever-growing list of new online platforms
The year 2021 saw a shift in how and where car dealers bought used cars. Montway data showed a significant increase in dealers buying online, whether from traditional auctions via live stream options, online auctions, or dealer trading platforms. If you are still relying on brick-and-mortar auctioning and shopping, you’re missing a huge piece of the pie. Dip a toe into the hundreds of thousands of used, wholesale and repairable vehicles available on auction sites. The search filters make it easy to find what you’re looking for and select from a range of vehicles that cater to different types of customers.
4. Increase your purchases from private owners and be accommodating when you can
At Montway, we’ve found car dealers are purchasing lease returns or buying from private owners more frequently than in the past. But with a lack of new car options, owners aren’t always ready to part with their car. We’ve even seen some car dealers go the extra mile, offering to pick up trade-ins in consumer driveways or push their offer level to the max. If you decide to pick up trade-ins, you’ll want to partner with a vehicle transportation company with national reach and the ability to pick up single cars at a reasonable price.
With no clear, definitive ending to the pandemic in sight, auto dealers need to take major steps in 2022 to make sure they remain competitive. Foresight, flexibility, and resourcefulness will ensure you keep your customers happy and your business thriving.
What new strategies have you been implementing? What advice do you have for other dealers?
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