Used vehicles are moving into showrooms

LAS VEGAS - Increases in used-vehicle profits and the proliferation of the technology are putting pre-owned vehicles in the showroom and on the Internet.

That's virtually changing the way used automobiles are marketed.

So says Barbara Vidmar, co-owner of Pueblo, CO's Vidmar Motor Co. and chairwoman of the American International Automobile Dealers Association (AIADA).

"My father-in-law was a new-car dealer," relates Ms. Vidmar to a session of the Conference of Automotive Remarketing. "The used-car lot was not as important as it is now. He went by the used-car lot twice a day: on his way to lunch and on his way back from lunch. That's about as involved as he was."

Times have changed, and dealers today need to be actively involved in the used-car business, says Ms. Vidmar.

"Today, used cars are a vital profit center," she says. "As a profit center it has spurred competition and created a more-demanding marketplace."

The same competition that brought forth companies such as CarMax and AutoNation, also spawned innovations like used-vehicle certification programs.

"The fact is customers benefit from the extended warranties and the attractive financing on these vehicles," says Ms. Vidmar. "And it's not just the factories featuring these programs, but dealers as well.

"We developed our own certified used-car program, the Vidmar Value Certified Used-Car Program. It has been very, very beneficial to us and to our customers."

Competition also has inspired dealers like Ms. Vidmar to invest heavily in their used-car business.

"There's no more trailer on the back lot," she says. "Used cars are moving into showrooms."

The Colorado dealer explains that her company recently bought an old restaurant and three acres of land near a major highway.

"We gutted it and made it into the crown jewel of used-car facilities," Ms. Vidmar says. "It's a 15-car showroom and it houses 10 used-car salesmen. We really believe in this part of our business."

Another part of the changing used-vehicle market landscape is the Internet.

"The Internet has changed our business forever," says Ms. Vidmar. "There are literally hundreds, if not thousands, of individual web sites offering anyone shopping for a car an enormous amount of information on line."

And this information has changed the customer, as well.

Ms. Vidmar says, "It can be daunting when a customer comes in knowing more about a particular car on your lot than your sale staff does.

"But I have to admit, I like the Internet customer. I figure anyone who has spent that amount of time researching their vehicle choice, studying values, pointing and clicking their way through cyberspace to my dealership has already made up their mind. They want to buy a car. At that point, it's my sale to win or lose."

In addition to adapting to the Internet and its ramifications, Ms. Vidmar says adapting to other kinds of technology can challenge dealers, whove been doing business pretty much the same way for nearly 100 years.

She cites examples in her store. At one point, her operations bought a new computer system, a key management system and changed phone systems all within a few months.

According to Ms. Vidmar, some of her employees either didn't learn how to use these tools or were afraid to use them.

"Smaller dealers might not think technology applies to them," she says. "But as they grow, and I think most of us want to grow, you almost have to put your inventory on line.

"And technology does help. It connects the new, the used, the accounting, the F&I. All of those things can become one. Technology is becoming more and more critical in all areas of our business, from sales and service to F&I to customer care.

"Technology helps us connect with our customers on a personal level. That's important because some dot-coms out there are selling themselves as a way to avoid the dealer and the buying process. We have to be able to show our customers the value that dealers add to that equation. That means communication. And it means building relationships with our customers."

Ms. Vidmar says she applies the "leaky barrel theory" to applying technology to her dealerships.

"The dealership is like a barrel that we're trying to fill with revenue," she says. "There are holes in the barrel. Customers are leaving.

"But we put all this time and energy into getting new customers when what we should be doing is plugging the holes. Technology helps us plug the holes by building better relationships with our existing customers."