Dealerships now realize that used car acquisition is necessary for their lot to supplement what they make from their new cars. The current and changing trends dictate that most buyers are opting for used cars. It is prudent, therefore, to know what it takes to stock your pre-owned vehicles.
When should stocking used car inventory take place?
To know when it is time to restock, a dealer needs to have a good inventory management policy that tracks all the vehicles in their lot. It does not pay to keep adding new inventory when other vehicles have been in the lot for long. Such stagnation leads to losses. Have targets for your inventory at the following intervals of 15 days:
The first 15 days sell 50%
By the 30th day, sell 25%
By the 45th day, sell 15%
By the 60th day, sell 10%
Determine what to do with unsold inventory after the 60 days. You may decide to ship it to another location where you are likely to sell. Alternatively, advertise a special offer so that you get it off your lot. You can then stock up your used inventory and track the progress of your sales.
Ideal Place to Purchase Your Used Car Inventory
Most dealers have a hard time identifying where to purchase the used cars. You can purchase them at auctions or through private party sellers. Though auctions offer a wide choice, the competition for them is high which pushes the prices up. This may reduce your profit margins.
Purchasing from private party sellers will be beneficial to you, as you will increase your sourcing channels. Once you streamline the process of stocking used car inventory from private sellers, you will be assured of continuous acquisitions. This is due to the sellers being from within the locality and can deal with your dealership directly.
The private party sellers will offer the vehicles at competitive prices. This translates to realistic profits without putting off potential buyers. You can also turn the private seller into your customer.
6 Tips for Purchasing Used Car Inventory
Test the vehicle. Check the car's interior and exterior thoroughly. Also, check the electronic devices in the vehicle such as the air conditioning, brakes, and locks.
Have your mechanic look at it. The mechanic will inspect the vehicle and give you an honest account of the car's state.
Obtain the car's history. Use the vehicle identification number (VIN) to get the history report.
Ensure the vehicle has a valid title. Do not purchase if it has no real title, as it could be a stolen vehicle.
Research the title. Confirm whether the title is clean or has liens. If it has liens, it means that the car's loan repayment is incomplete or other creditors are still owed.
Comply with the state laws. Ensure the private seller complies with the state laws by doing the mandatory tests before selling to you.
Adhering to the above tips for stocking used car inventory will give you an easy time at your dealership. Your profits will be significant and will supplement what you make from the new cars section. Contact us for more information.