The “Secrets” to Selling More Used Cars for More Gross
Every great used car manager you or I have ever met already knows the “secrets” to selling more used cars for more gross profit. (I wrote “secrets” in quotes, because these aren’t really secrets – since everyone knows them – they’re more like axioms that everyone should heed, though not all do.)
Whether we’re talking about your used inventory today or 30 years ago, two very simple strategies are really the “secrets” that drive the turn rate and the bulk of your used car profits. These secrets are:
- Buy right
- Recondition faster
Don’t get me wrong, while I wrote these are “simple strategies,” there is nothing simple in their implementation. These take well-executed and refined processes, along with a skillset that separates great used car managers from the rest of us.
Moreover, I’m not here to teach what your used car manager already knows is important to moving more metal for more dollars; my goal is to give some insight into a few things he or she may not fully understand they can do to aid in these efforts.
There’s More We Can Do?
Yep. In fact, beyond the two “secrets,” there are actually a few easy things you can quickly implement to ensure your efforts to buy right and recondition faster aren’t wasted when it comes to marketing and selling your used cars.
Specifically, these three areas are where top dealers further separate themselves from their competition:
- Always price to market;
- Always defend your online price; and
- Always cast a wide net.
Always Price to Market
While I’m hopeful you already understand the “why” around pricing your used inventory close to the expected selling price, I think it’s important that we hit on a few of the highlights that drive this strategy:
- Virtually every buyer is online.
- Virtually every buyer is looking at multiple sources before they buy.
- Virtually every other dealer is pricing their used cars to market.
Ten years ago, when you priced above the market and asked consumer to “call for price” or “click for e-price,” you could generate a good amount of calls, leads and interest in your vehicles. This, of course, was because every other dealer priced their vehicles similarly.
Today, “call for price” equals “highest price” in the minds of qualified buyers. Additionally, because we know most buyers make no contact with you before they buy, pricing your vehicles to market increases floor traffic (just as running a loss leader in the newspaper did 30 years ago).
Always Defend Your Online Price
If your inventory is priced-to-market, then no one is completing a form, calling you or showing up on your lot because your price is too high. They’re doing these activities because they’re trying to buy from you! They’ve decided that your vehicle is a good value, they believe it is relevant to their needs, and now they just need you to be authentic and sell them the car.
The only reason they ask any pricing questions (like, “Is this your best price?”) is because we’ve trained consumers for 100 years that your listing price is a joke we like to play on unsuspecting buyers. We’ve trained them that there is always a lower price – they just need to ask.
It’s time to stop giving away the gross profit you worked so hard to earn when you bought right and reconditioned faster; it’s time to defend the price. Interestingly, defending your price is relatively easy and, when done correctly, will sell you more cars that the alternative.
Here’s a quick response to the “Is that your best price?” question that your team should employ:
“If you’ve been shopping online, then you know we price all of our vehicles competitively right from the beginning. We would never dream of insulting our customers by showing you our second best price and then making you jump through a bunch of hoops to find some hidden best price. Now, that vehicle is priced to sell at…”
(For a video version of this lesson, feel free to share this link with your team: Overcoming the Objection: Is that your best price?)
Always Cast a Wide Net
So, you’re priced right and your team is prepared to defend your online price; now what?
Your vehicles must be seen to be bought.
Top dealers know that not every buyer in the market is going to come to any one website – especially yours – so they cast a wide net with their digital marketing. That is, they make sure their used car inventory is available virtually anywhere a potential customer might search.
This means using more than just the traditional classified listings websites (that employ the monthly subscription model) and expanding to sites like Craigslist (where you pay a flat rate for every vehicle you list) and UsedCars.com (where you pay per valid lead you receive).
(Note: UsedCars.com recently relaunched, and as of this writing, listing on the site for new dealers is free.)
Data from our clients shows that while there is some cross-shopping among third-party sites, many used car buyers only shop one or two. Not having your used car inventory where the online buyer is looking guarantees your efforts to buy right and recondition faster won’t drive the improved turn and higher margins you expect.
Wait, So There are Five Secrets?
For great used car sellers, buying right, reconditioning faster, pricing to market, defending your price, and casting a wide net aren’t really secrets, per se, they’re more like a way of life. That’s why I’m hopeful for you and your team that these will very soon be a way of life in your dealership, as well.