Vehicle Buying Has Changed. Has Your Dealership Responded?
2020 has forced us all to make adjustments to our behaviors, and car buying is no exception. As purchasing patterns have changed, dealerships have noticed their profit levels and sources have changed, too. What has this meant for dealership inventory specifically, and how can dealers be more in control of their own circumstances?
Vehicle sales trends have changed throughout the year.
Your sales department has probably felt the pain this year when it comes to new car sales. During the spring and summer, consumers were buying fewer new vehicles for a few reasons.
Now, new car sales are back on the rise, but one problem remains – lack of new inventory. Many vehicle manufacturers halted production earlier this year and are still playing catch up. Consumers still need to buy vehicles, so dealerships need to find a way to keep their lots full.
It’s harder to acquire a used car at the right price.
As used car sales have increased, dealerships have fought to keep their lots full of popular inventory, but this comes at a cost. It’s simple supply and demand. Dealerships need more quality used vehicles, but there are less vehicles to choose from. This means paying more money for the vehicles they want, including outbidding the competition. Are there more cost-effective acquisition methods?
With minimal risk comes great reward
There are risks to buying a trade-in that may make appraising it difficult. Do you know the service history? If repairs are up-to-date, can you trust where they were done?
If you approach a repeat service customer in your own dealership and you have the right transactional data, you have the maintenance records right in front of you. You can safely spend money on a vehicle with a known history instead of risking it on an unknown trade-in or at a high-priced auction.
You have to stock what shoppers want to buy. You can go to an auction, place ads, or cold call customers to find the vehicles you’re looking for, but there are better ways to find these vehicles without breaking the bank
The most effective way to achieve inventory balance is a data and equity mining service to help find customers who are likely to upgrade to a new vehicle. Using demographic, transactional, and behavioral information, you can find the right new fit for the customer. If you propose a new vehicle for that customer, they are likely to trade-in the vehicle you want, for the vehicle they want.