From FaceTime to Analytics: Virtual Acquisition Best Practices

Used cars currently are a hot commodity, and inventory shortages will persist in 2021. With more consumers expressing a desire to complete sales processes online, virtual acquisition is becoming an increasingly attractive strategy.

According to a recent Cox Automotive survey, 40% of franchised dealers believe the percentage of used inventory they acquire through digital tools versus in-person will grow significantly in 2021.

In light of this trend, establishing a reliable and uniform remote appraisal process will be essential for used car dealerships. A streamlined appraisal process – and the ability to provide an accurate vehicle valuation, sight unseen – creates confidence for the customer and facilitates quicker inventory acquisition for the dealership.

From utilizing Apple’s FaceTime technology to leveraging online condition reports with consumers, there are some best practices dealers should follow when looking to conduct remote appraisals and virtual acquisitions.

Strategically Streamlining Communications

When operating in the virtual world, streamlined communication is critical. For some dealerships, an acquisition specialist who maintains expectations and handles all client engagement can be a valuable team member.

Another approach is to empower all members of the team to facilitate a sight-unseen appraisal, regardless of their individual expertise. This can be an important strategy in increasing the percentage of cars acquired compared to the number of cars appraised.

Reconditioning work is important when virtually appraising vehicles, so team members should feel confident asking as many questions as possible to eliminate surprises down the road. Interactive client-facing condition reports allow the client to confirm details and give both sides of the deal full transparency.

Selecting the right condition-reporting method to implement is critical, because less time required to complete a questionnaire leads to higher conversion rates, higher offer volumes and less friction at the dealership. Setting clear and concise goals around communication and recon will help all team members remain aligned throughout the ramp-up process.

Utilizing Digital Tools

FaceTime, Apple’s video chat application used on iPhones, iPads and Mac computers, has been as incredible a tool for virtual acquisitions and remote appraisals over the past year as it has been for connecting with family and friends. Video apps such as FaceTime or video walkarounds allow used car dealers to see the car in as much detail as possible without physically being there with the vehicle.

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An average of six photos per unit is a great benchmark to ensure that all bases are covered. For dealers looking to appraise used vehicles remotely, third-party validation through a trusted source can guarantee the deal is as accurate as possible, and give the client peace of mind.

Applying Data to Appraisal Alerts

Dealers should utilize appraisal alerts to help automatically determine if a vehicle price is considered too low or too high. These alerts are based on a guidebook of the dealer’s choice, making them completely customizable to the retailer’s specific market.

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If the past year has been any indication, auto inventories will remain a challenge this year; less than half of franchise dealerships predict they will return to pre-pandemic inventory levels in 2021.

Trends indicate increased use of digital solutions such as virtual acquisitions will continue to be baked into the car-buying process – this evolution is here to stay. While this transition may seem daunting in the short term, it will only help dealers moving forward.

Randy Kobat (pictured above, left) is vice president of operations for Inventory Management Solutions at Cox Automotive.