You need to support your local sales, whether they are called “pig sales, sled sales” or any other names that are used by the small local guys who are not associated with a large syndicated auction group. Your support for local auctions needs to be more than just lip service. Promote the auctions. Be seen and heard at them. After all, it’s your money that’s being made by the people selling your cars there.
Every time we take on a new client, the first thing we do in-house is stop their wholesaling of trades until we find out exactly where their used cars are going. We know a car’s profitability from the time it leaves your dealership until it is eventually sold. The recon cost, the money spent on transportation, the profit made by the wholesaler and the auction fees are staggering.
Typically, we have not fooled with older used cars in many years because we have become too pre-owned certified from the manufacturers with later model cars and too computerized by today’s managers who are “dot com” trained. Thus, we are now only interested in current to 4-year old cars. Ten years ago we marketed current to six-year old cars. Vehicles that are going to auction or going to wholesalers that ultimately go to your local auction are vehicles that don’t appeal to you, your manager or your staff. It doesn’t mean that the public doesn’t like them, or they cannot turn a profit when sold. It means that you, your managers and your staff don’t want to fool with them, so bam, they’re out the door. Your guys will even call wholesalers to find out what they think those cars are worth and how to price them. I have never understood, in my entire career, why a dealer would allow his pre-owned manager to ask a wholesaler what price he is willing to pay for a car. This insanity minimizes the dealer’s profit and maximizes wholesaler’s profit for those used cars.
Would you hire a used car manager who told you in his interview that he would hire an outside company who uses illegal immigrants to clean up my cars because he wouldn’t want to fool with training a porter to do them right, he would wholesale trade-in cars that he didn’t like based on outside prices and he would not work for you if he couldn’t make the factory happy by maintaining mostly certified cars in stock? These are things you need to think about. The basic fundamentals are not going to leave this industry. I don’t care how computer literate you or your manager. Sixty-four percent of the time a new or used car deal will be decided on the worth of a trade-in. Today we look at sold prices on auction reports, we allow computer companions to tell us wholesale and retail prices without ever really paying attention to the quality of the car.
Your manager should train a new car salesman to bring him a deal and say “Hey, I’ve taken a flat cab, short bed, black F-150 XL in that has 70,000 miles on it, it’s an ‘04, it’s a one-owner, he has all the paperwork on it, but it’s a little edgy. It’s on the dealers demo, we need to move it and I need X number more dollars on this truck. The guy that I want is the guy that can look at that truck and say, yes, I can do that and know in his mind he can slap a set of dual exhaust on that truck, he can walk out to a GMC Envoy he was getting ready to wholesale that has a brand new set of BF Goodrich ATs and swap them off on the Ford, detail that truck, sit it right out on the point, put “Fresh New Trade” in the window with a history on it and sell it.
That’s what we’re missing today. You need to have him working with your local seller. You need to represent some cars out there. Your manager needs to get known on the block locally. Your store needs to get known at the auction once again to the local independents and cut out that middle man wholesale.
‘Til next month,