10 Ways to Sell Used Cars
What's a person need to know to sell used cars successfully? Thrifty University, developed by Thrifty Car Sales, and Reynolds and Reynolds Co., came up with the following best practices: Compute profits by lot space, not by individual vehicles. Dealers who compare vehicle gross vehicle-to-vehicle may be leaving money on the table. It can be more profitable to turn more vehicles at lower grosses than
December 1, 2002
What's a person need to know to sell used cars successfully?
Thrifty University, developed by Thrifty Car Sales, and Reynolds and Reynolds Co., came up with the following best practices:
Compute profits by lot space, not by individual vehicles.
Dealers who compare vehicle gross vehicle-to-vehicle may be leaving money on the table.
It can be more profitable to turn more vehicles at lower grosses than to turn one vehicle that brings a higher gross.
Implement a 45-day turn or less for maximum profitability.
For example: Assume a dealer has a lot capacity of 75 vehicles, and averages 90-day turn (4× per year multiplied by the average gross per vehicle). Implementing a 45-day turn (9× per year multiplied by the average gross per vehicle) would more than double the annual gross per vehicle.
Study your market and competition; develop unmatched knowledge of your market.
Utilize accessible market data to keep you up to date on what your competition is selling.
Techniques as simple as shopping the competition and clipping ads can improve your competitive abilities.
By studying competitive ads you can learn what kind of customer your competition is marketing to.
Dealers need to better understand their overall market to gain a competitive advantage, from reaching ethnic groups to understanding traffic and driving patterns.
Know your customers, including why they bought elsewhere.
Keep an accurate desk log to improve inventory mix, closing ratios, advertising and more.
Find out where your customers are coming from. Eighty percent of your customers will not buy from you. Find out why by asking.
Build a referral base and follow-up with your customers.
Like new-car operations, used-car departments should develop an effective and uncomplicated Customer Relationship Management program to track leads and customers. It will increase closing ratios, improve repeat sales and increase service business.
Increase profits by accurately estimating reconditioning costs.
A vehicle that needs serious reconditioning or is off the lot for two weeks is a profit drain. Used cars depreciate as soon as they land on the lot.
Know your product.
Many sales are lost because salespeople haven't taken the time to learn about the vehicle. The Internet is an easy and resourceful way to learn about a wide array of vehicles.
Keep lot and product appearance impeccable.
Create a regular program to review and repair (if necessary) all the inventory on your lot. Spend time with a professional to dress the lot in a colorful and exciting way.
Dirty lots and vehicles, or worse, vehicles that won't start or run right, mean lost sales.
Know how to position and sell certification
Certification is becoming the standard playing field for used cars.
Train your staff and yourself.
From greeters and receptionists to sales pros, BDC personnel and managers, train your staff in:
The basics of customer contact, sales and management techniques
How to deal with “problem” customers.
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