Used car dealerships have likely become accustomed to the new landscape of doing business. Throughout the pandemic, the auto industry has been one of the hardest hit, and dealers are still working to establish their new norm and implement effective buying and selling strategies with the future in mind
While used car sales were largely stifled over the course of 2020, the meteoric rise in both new and used car demand soldiers on. As consumers continue to turn out to buy a used vehicle, it’s never been more important for dealerships to fine-tune their dealership inventory strategies to ensure they’re buying and selling vehicles as efficiently as possible. And, being able to compete with - and beat - the big box national retailers isn't a bad side effect either.
Let’s take a look at some do's and don'ts of buying and selling dealership inventory. We'll point out the avoiding common pitfalls to avoid and help you leverage the latest methods and resources to propel your dealership to the forefront of innovative buying and selling solutions. It's our goal to make sure you're well-positioned to navigate the current automotive market and continue that success down the road.
Do: Mind Your Existing Supply
Carefully minding your existing supply of dealership inventory is critical to ensuring you’re not overstocked or understocked in any particular vehicle. Bringing more cars onto your lot every month is important, so long as they are the right cars.
Establishing your core inventory will allow you to determine which vehicles are your best sellers, as well as which vehicles are best left on someone else’s lot. You also want to monitor your sales records from previous months to get a sense of how many vehicles of a certain model you’re typically selling.
If you have fewer vehicles than what you typically sell, then you know it’s time to bring some onto your lot. On the flip side, if you’re overstocked, you might want to consider moving surplus inventory to a different dealership location.
Don’t: Let Emotions Drive Decisions
If you’ve ever attended an in-person auto auction and have passed on the last 10 vehicles up for sale, you’ve likely felt inclined to pull the trigger on the next vehicle that comes up for bidding. Additionally, it can be easy to get caught up in the chaos of live auctions and suddenly find yourself in a bidding war with another dealership. A general rule of thumb to keep in mind when buying and selling dealership inventory is to check your emotions at the door.
In our brains, emotions often trump logic. But letting your emotions guide your buying decisions will often result in fewer profits or even sunken costs. Remember, it’s always best to evaluate cars and base your buying preferences on data and statistics versus gut feelings and emotions.
Do: Make Smart Bets
Whenever you’re bringing new cars onto your lot, you’re rolling the dice in the hopes that you’re acquiring highly sought-after vehicles that will ultimately earn your business a profit. To ensure the dice roll in your favor, make sure you’re taking a data-driven approach to make bets on what’s going to perform well on your lot.
Take a look at your own sales history in order to get a sense of what’s performed well in the past, as well as what vehicles you’ve had a hard time selling. Make a conscious effort to ensure you’re properly stocking your dealership with your best performers, as these are the least risky vehicles to make bets on.
This isn’t to say that you shouldn’t target vehicles that you’ve never had on your lot before. Just make sure that you’re able to justify your buying decisions with reliable data and relevant statistics.
Don’t: Buy Vehicles Without Doing Your Homework
If you’re going to compromise on quality in order to buy a used vehicle at a lower cost, you should thoroughly review the condition report before signing on the dotted line. Rushing through the vehicle acquisition process can lead you to bringing vehicles onto your lot that aren’t what they were cracked up to be.
You should know everything about your vehicles before you actually buy them. This includes looking at repair records, mileage, last inspection date, and more.
Having peace of mind for every purchase you make requires you to know your acquired vehicles like the back of your hand. That way, you can avoid surprise issues later on that end up diminishing the value of your dealership inventory.
Do: Use Data to Establish Buying Strategies
Lastly, as we’ve already touched on, data can be your best friend when it comes to making sound buying decisions for your dealership. Platforms like CarOffer can enable you to streamline the vehicle acquisition process and ensure you’re always acquiring the right vehicles at the right time for the right price.
Analyzing sales history and dealership inventory records ensures you know what you’re able to list a vehicle for and what you can sell it for while still making a profit. It’s no longer enough to rely solely on your industry expertise and years of experience to guide your dealership inventory strategies. Empower your business with insightful data and advanced tools to get ahead of the competition and establish error-proof buying strategies.
Give CarOffer a Test Drive
At CarOffer, we provide you with a better way to buy, sell, and trade used vehicles. Designed with the dealer in mind, our solutions enable you to manage your pre-owned inventory with complete confidence and control. Working together, we can help you regain valuable time and resources for your dealership, and help position your business well for whatever the future may bring.
Contact us today to request a demo or learn more about our automotive inventory sourcing solutions.