Dealerships across the country constantly have to grapple with whether to keep a car or send it to the auction. They also have to determine if the vehicles in their inventory are worth reconditioning for the lot.
Sometimes, the challenge is determining how far out the used car department should start planning for seasonal demand. All these questions boil down to the effectiveness of used car inventory management. Managing a dealership inventory the right way is key to a business's overall success.
The above questions are even more pertinent amid the semiconductor shortages, leading to production delays. This post introduces the steps every dealership must leverage to get the most of their inventory.
Effective Used Car Inventory Management Relies on Industry-Based Data
Industry-based data is at the disposal of every dealership and is a potent tool for decision-making. Every dealership's CRM and DMS has a wealth of customer metrics crucial to creating and maintaining a profitable inventory. The information is beneficial when bringing in new cars through trade.
Sales leaders should stay in the know regarding the changing consumer preferences and demands. They also must constantly analyze consumer data to establish localized market demand and trends.
For example, they should loOKat details like the makes and models that have sold well over the last 1-3 months and which vehicles have not moved for the longest time. This information will be crucial in determining:
The Need to Maximize the Existing Pre-Owned Vehicle Inventory
The growing interest in the market for pre-owned vehicles can work in the favor of dealerships. With the right acquisition strategy in place, dealerships can purchase high-quality used vehicles that will not only sell faster but will require fewer repairs and come with lower acquisition costs than standard trade-ins or auction vehicles.
Forward-thinking dealerships leverage changing consumer buying behaviors to get the most out of their used car inventory management efforts. They can effectively predict reconditioning costs versus market demand to maximize profits.
Creating and Maintaining a Strong Homegrown Used Car Inventory
Creating a robust homegrown inventory entails leveraging rich customer data and advanced marketing tools to decide on various issues. Vehicles in a homegrown inventory represent the pinnacle of profitability. That's primarily the case if they were once sold in a new vehicle sale and later traded for reconditioning.
Investing time and resources in creating a solid homegrown inventory strategy closely equates to more revenue and profitability. It also contributes to customers' growing loyalty while defending against customer defection through constant communication.
Improving Your Used Car Inventory Management
As dealers around the U.S. continually face evolving used car inventory challenges, consumer demands are still intense. You can leverage this data to make the most of your inventory. Instead of taking a passive approach or waiting for industry recovery, implement the above best practices to take control of your future success.
For more assistance in the process, Vettx can come to your aid. Contact us today to schedule a consultation or request a demo to see how our solution works.