• DigitalDealer-horizontal-Logo
  • ATTEND LAS VEGAS
    • Attendee
      • Registration & Pricing
      • Agenda At-A-Glance
      • Exhibitor List/Floor Plan
      • Sponsor List
      • Hotel & Travel
      • Hosted Dealer Program
      • FAQ
      • Mobile App
    • Exhibitor
      • Exhibit/Sponsor
      • Advertising Opportunities
      • Exhibitor Resources
      • Exhibitor Tips
    • Education
      • Overview
      • Show Schedule
  • ABOUT
    • Conference Overview
    • Best Of Awards
    • Become a Speaker
    • Press Inquiries
    • Partnership Programs
    • Health & Safety
    • Contact Us
    • Get Updates
  • RESOURCES
    • Webinars
    • Downloads
  • NEWS
    • Auto Retail News
    • Digital Editions
    • Press Releases
    • Submit Editorial
    • Subscribe
  • .
  • ATTEND LAS VEGAS
    • Attendee
      • Registration & Pricing
      • Agenda At-A-Glance
      • Exhibitor List/Floor Plan
      • Sponsor List
      • Hotel & Travel
      • Hosted Dealer Program
      • FAQ
      • Mobile App
    • Exhibitor
      • Exhibit/Sponsor
      • Advertising Opportunities
      • Exhibitor Resources
      • Exhibitor Tips
    • Education
      • Overview
      • Show Schedule
  • ABOUT
    • Conference Overview
    • Best Of Awards
    • Become a Speaker
    • Press Inquiries
    • Partnership Programs
    • Health & Safety
    • Get Updates
  • RESOURCES
    • Webinars
    • Downloads
  • NEWS
    • Auto Retail News
    • Digital Editions
    • Press Releases
    • Submit Editorial
    • Subscribe

DealerPoint: May 21-23, 2024
Conference & Expo:
October 8-10, 2024

REGISTER NOW EXHIBIT / INQUIRE
Q

NEWS:

Dealer Ops & Leadership | Trending Industry News
October 18, 2020

The Ramifications of Price Increases

Posts:
Dealer Ops & Leadership | Trending Industry News
October 18, 2020

The Ramifications of Price Increases

By Sean Reyes, Chief Marketing Officer, Recall Masters

Dealerships are having a tough time acquiring used vehicle inventory at competitive prices right now. Due to recent OEM shutdowns, new car models are sparse. And, even with large rebates, incentives, and low interest rates, consumers are being especially careful with their finances in these tumultuous times and are shopping for used vehicles more than ever before.

To compound the problem, dealers find themselves overpaying for inventory through traditional auctions and then have to pass those high prices and the various auction fees that go along with them onto the consumer. Not only that, but they also have to trust the vehicle’s condition as it is presented to them – all in the name of having a healthy volume of inventory available for those consumers who are shopping.

A recent article, based on research published by the Department of Labor, indicates that the cost of living has increased and credits “used car prices for the increase.” While the market dictates supply and demand, as it would at any time, right now the market is increasingly challenging for both dealers and consumers. On the one side, you have dealers trying to keep a well-stocked inventory. And on the other, consumers are finding used cars more expensive than ever before.

Dealers are forced to trust auction inspectors to accurately represent the vehicle condition. I heard about a dealer who recently purchased a vehicle for their front-line inventory from a well-known auction company. In the pictures and description, it looked like a desirable vehicle. However, when the dealer received it there was a Confederate flag etched into the rear window. Not a sticker, mind you but etched into the glass. This dealer would have to replace the whole rear window to make it desirable at a considerable expense.

Dealers are turning inventory faster than ever for the simple fact that there is less inventory. Even with the cost of used car prices being blamed for cost of living increases, the fact remains that there are plenty of consumers out there that not only want new (or new to them) vehicles but may actually NEED them.

The Catch-22 here is that some dealers may be so focused on inventory turn they might neglect safety issues before selling the vehicle, especially in the current climate where they are paying higher than normal values simply to have inventory on their lots.

We are certainly in difficult times. Dealers – just like any other business – have the right, but also the need to be profitable. Consumers still need vehicles and want to buy them. But there is an ethical dilemma this situation presents. Do you flip a car quickly that may be unsafe for the buyer or ensure that all vehicles sold are safe?  Remember, selling a pre-owned vehicle with an open recall, while legal, does not protect a dealer from state product liability laws and a wrongful death lawsuit should an accident occur as a direct result of the defect. 

Gross profit is vital, but so is the safety of the consumer. Finding a balance between the two in these times will enhance your dealership’s reputation, customer confidence, and, ultimately, earn loyalty and return business. As well as protect your dealership from those costly lawsuits.

About the Author

Sean Reyes oversees all marketing efforts at Recall Masters as Chief Marketing Officer. Sean’s experience spans more than 25 years of business development and strategic marketing experience, having worked in the automotive, healthcare, finance and technology industries to serve customers like American Express, Toshiba, Western Digital, Cox Communications, Gateway, Novartis, Microsoft, IBM, Compaq, HP, Confident Financial Solutions, MyCustomerData, Toyota of Orange, and Fletcher Jones Mercedes Benz. While he has an accomplished portfolio of design, production and coding skills, his strength is in “go-to-market” business modeling and digital marketing strategies. Sean spends his free with his family,, time hiking, kayaking, playing guitar and going to concerts with his kids

Dealer Ops & Leadership•Trending Industry News

SHARE

Share on Email
Share on Linkedin
Share on Facebook
Share on Pinterest
Share on Twitter
← Previous Article Next Article →
Posts Dealer/GM News

New Research Reveals Age and Gender Differences in Vehicle Add-On Purchases

When consumers purchase cars at an auto dealer, they often buy supplemental products and services called voluntary protection products (VPPs). These provide additional coverage and protection for certain vehicle components or services not covered by
Posts Dealer/GM News

Nearly 4,000 Car Dealers Ask President Biden to Slow Down EV Push

Car dealers are asking President Joe Biden to “tap the brakes” in his administration’s electric vehicle (EV) push. A total of 3,882 franchised car dealers the U.S., calling themselves the EV Voice of the Customer, published the letter on No
Posts Dealer/GM News

New Research Reveals Age and Gender Differences in Vehicle Add-On Purchases

When consumers purchase cars at an auto dealer, they often buy supplemental products and services called voluntary protection products (VPPs). These provide additional coverage and protection for certain vehicle components or services not covered by
Posts Data & Analytics

Digital Retailing Continues to Grow at Auto Dealerships

A recent report found car dealers offering consumers the ability to do a deal online has grown to 40% in the last year—but an urgent need to cutdown on repetitive steps happening in the showroom. Nearly all car dealers currently using digital retai
Posts Dealer/GM News

Ciocca Agrees to Purchase 10 More Pennsylvania Dealerships

The Ciocca Dealership group is growing its holdings in Pennsylvania. The agreement has Ciocca purchasing Apple Automotive, the automotive division of York County, Pa- based Stewart Companies. Terms of the deal was not disclosed, with the final transa
Posts Dealer/GM News

Mercedes Launches First Charging Hub in U.S.

Mercedes-Benz is offering a change to the way Americans charge their vehicles in the same way Starbucks altered the routine of getting a cup of coffee. Mercedes, in a joint venture with MN8 Energy to launch a network of premium electric vehicle (EV)
Posts Digital DealerEveryone

Digital Dealer Unveils New Branding & Announces Launch of DealerPoint, Offering Targeted Networking and Driving Innovation

Digital Dealer has revealed its new branding and announced the launch of DealerPoint, a dynamic addition to its event portfolio.   This unveiling of the refreshed logos marks a symbolic step forward for Digital Dealer, aligning with its commitment
Posts Dealer/GM News

Hyundai Dealers Will Be the First to Sell Cars Through Amazon Platforms

Amazon is getting into the (virtual) car dealership business. At the Los Angeles Auto Show Nov. 16, the Seattle-based online behemoth announced auto dealers for the first time will be able to sell vehicles on Amazon’s U.S. store in 2024—with Hyun

NEWSLETTER

SUBSCRIBE

DEALER MAGAZINE

Dealer Magazine March/April 2023 Issue Featuring an Interview with NADA 2023 Chairman
MAGAZINE

Explore All Our Brands

FOLLOW US ON

  • Follow
  • Follow
  • Follow
  • Follow
  • Follow
© 2023 Emerald X, LLC. All Rights Reserved.

ABOUT    CAREERS    AUTHORIZED SERVICE PROVIDERS   DO NOT SELL MY PERSONAL INFORMATION   TERMS OF USE   PRIVACY POLICY