Make the Most of the Current State of Preowned Inventory – And Still Turn a Profit
Unprecedented supply and demand conditions have reshaped the used vehicle market, and not all OEMs appear to be smoothing out yet. The auto industry is still dealing with COVID-19 delays due to the lack of production, which led to repeat shortages.
Because of the pause in new vehicle production, used vehicle prices skyrocketed to new heights. Prices have come down slightly but are still higher than pre-pandemic.
Although prices and interest rates are high, used vehicles are still preferred by over 70% of consumers needing affordable transportation. But even when customers are willing to fork out the extra money for a used vehicle, model, trim, and color options are limited, and the main avenues to obtain preowned inventory are constrained.
Because of the continued volume reduction and demand increase, the used vehicle market is expected to remain unpredictable, competitive, and prices aloft.
So, what does your dealership do in the meantime?
The obvious step is to build your preowned inventory, but this is easier said than done.
Used cars have historically been a money-maker for dealerships, but sourcing them involves a good amount of resources: time, energy, and money – not to mention a good amount of guesswork.
Live and online auctions leave dealerships bidding against each other, lowering their margins and leaving dealerships with auction fees, transport costs, money spent on repairing and reconditioning, and fixed costs like interest from floor-plan financing. The longer cars sit on the lot, the more expensive they become.
The good thing is that when it comes to profitable, effective sources for preowned inventory, all you have to do is take a closer look at your existing database.
Data mining platforms like AutoAlert’s AlertMiner and AlertMiner Pro easily become the best place to source high-demand preowned vehicles that sell quickly and turn a big profit.
Even in times like these, you can set your dealership apart
When it comes to preowned cars, knowing exactly what your customers want – and being able to provide it when they want it – will make your dealership stand out from the competition in today’s quickly evolving market.
Predictive data mining platforms can help turn your customer base into your best source for used vehicles, and platforms like AutoAlert allow your team to search your existing database for specific cars and then, through proactive marketing channels, make offers to those customers.
And because AutoAlert opportunities have proved to convert at a higher rate than other opportunities, your team will gain confidence with increasing success. Your customer loyalty and dealership reputation will improve as well!
“We can easily engage a customer, get them into a new car with no money down while keeping their payments the same, and our profits increase on the deal as well. So, it’s fantastic for the dealership and the customer!”
Brad Mugg, Managing Partner at Honda of Downtown Los Angeles
Knowing your customers and understanding the market
AutoAlert does the heavy lifting by notifying your team of potential customers who could be in market through alerts that signifies your customers’ propensity to buy, when, and why.
AutoAlert combines data collected from shopping behavior, online engagement, and marketing resources that are analyzed to predict which customers are more likely to upgrade to a vehicle with a similar payment to what they are currently paying.
Understanding market trends and utilizing the technology and data you already have can ensure you continue to take a strategic approach and even capitalize on the current conditions.
Learn more about how to get a competitive edge in the used car market by securing your spot for this upcoming webinar: Navigating the Used Car Market: Overcoming Challenges and Maximizing Success.
Are you looking for a personalized sales demo? Click below to see how AutoAlert’s innovative solutions can directly benefit your dealership.
