Tips for Increasing Your Used Vehicle Profit Margins
With the large supply of newer models of vehicles in used inventories, the certified pre-owned market is a powerhouse for dealers. This vast selection of vehicles should be an easy method to achieve profitability, but there may be some factors that are standing in your way. This is especially true for smaller, independent dealers that may not have the resources available that large, corporate entities have access to. Add to this the extra expenses of getting pre-owned vehicles up to certified status, and you see your profit margin beginning to shrink. So what can be done to get the most out of your CPO inventory? AMP Remarketing has some tips and tricks for you — the most powerful of which is our multi-platform selling solution.
Update Your Used Vehicle Sales Strategy
In this information age, consumers are savvier than ever before due to the resources available online. Because of this, dealers should begin to act more like consultants to prospective buyers, not necessarily salespersons. Buyers are wary of being snookered, and value transparency in vehicle pricing above just about anything else. Because of this, it’s essential that dealers provide important information that impacts the vehicle price long before the end of the deal.
Online price comparison shopping is the car dealer’s new reality. You can be assured that while customers are shopping your dealership, they have at least two other dealerships pulled up on their smartphones and are comparing prices. For this reason, your strategy must include competitive pricing, done in real-time, and is consistent with the vehicles that are available in your immediate region.
Especially in today’s social health climate, customers want to spend as little time as possible physically at the dealership. To create a better buying experience, provide as much information about your pre-owned vehicles online as possible. You could begin to see customers come to the dealership already having done the bulk of their research and practically ready to make a purchase.
Choosing the Vehicles for Your Market
Which vehicles sell quickly and which ones gather dust on the lot often depend greatly on your local market. A savvy dealer will need to use buyer data to decide which vehicles should be stocked. You can determine this data by examining these factors:
- In your area, what are the top-selling types of vehicles?
- At your dealership, what models and brands have sold better than others?
- What vehicles in your inventory are in low supply compared to the demand?
When you keep the right vehicles in stock, faster turnaround time and a more profitable sale becomes increasingly more likely.
Trick Out Your Website
Almost exclusively, the modern car-buyer begins their used vehicle hunt online. Because of this, it is absolutely essential that you have a website for your dealership that is both user-friendly and informative. The goal of your website should be one thing, and one thing only — getting the customer to your lot.
How do you communicate to the customer through your website in such a way to compel them to come to you for their used vehicle solution? Effective websites have these three things in common:
- A clearly stated value proposition — you need to show that you have the solution to your customer’s problem.
- Reasons for customers to trust your business — this can be through testimonials, links to social media reviews, etc.
- Provide an easy next step or a call to action. You have the solution, all they need to do is click the link or call the phone number.
Improve Your Reconditioning Methods
There’s no denying that reconditioned vehicles move faster off the lot than fresh acquisitions. Additionally, these reconditioning practices allow you to provide warranties and CPO-status that garner customer trust. There are a few things you can do to streamline your reconditioning practices:
- As long as it won’t disqualify a vehicle from receiving a CPO status, you can use high-quality, non-OEM parts.
- Try to complete vehicle reconditioning as quickly as possible.
- As often as you can, acquire vehicles that require less work to be ready to sell.
- Recondition vehicles for wholesale — other dealers are far more likely to buy a vehicle in great shape, just like your normal retail customers.
The AMP Remarketing Solution
We’d be remiss if we didn’t take this opportunity to offer our innovative solution to handling your CPO inventory. With new, fast-moving technology, selling vehicles online as opposed to in-lane can be challenging for dealers that aren’t familiar with auctions. Many dealers simply don’t want to have to deal with the after-sale process and the sets of arbitration that go with it. That’s where AMP remarketing comes in!
We’ve partnered with Manheim PA to provide digital event sales that offer buyers the opportunity to procure only frontline and CPO-ready inventory directly off of dealer’s lots. All of the vehicles will reach a broader market through national marketing campaigns, attracting more buyers. Dealers are able to list aging units for auction while keeping them on-site until the morning of the sale, ensuring that they’re constantly available for retail opportunities, rather than being stranded off-site. Once the vehicle is sold, selling dealers have 3 days to ship the vehicle to the auction, or alternatively, the buyer can choose to pick up the vehicle at the seller’s lot, saving dealer transport costs.
You can try this solution of the future absolutely FREE for 30 days with our 30-Day Test Drive. Contact AMP Remarketing today and see just how easy it is to increase your profit margins with a tech-savvy solution. You’ll be on the pathway to greater profitability in no time!