Used Luxury Cars are Hard for Dealers to Find

Auto Remarketing - April 17, 2013

Based on recent AutoTrader.com vehi­cle scarci­ty data, used lux­u­ry cars topped all of the site’s CPO scarci­ty lists for both Feb­ru­ary and March.

Find out how you can com­bat this scarci­ty and ful­fill CPO needs.

So, if you are a lux­u­ry fran­chise deal­er, how can you com­bat this scarci­ty in order to ful­fill the inven­to­ry needs for your cer­ti­fied pre-owned oper­a­tion?

We turned to the inven­to­ry experts to find out.

Jeff Sum­mers, the chief exec­u­tive offi­cer of First­Look Sys­tems, boiled his advice down to three key areas.

The first, he said, is to increase the close rates dur­ing the appraisal process.

“And the No. 1 strat­e­gy we’re see­ing for that, par­tic­u­lar­ly in the lux­u­ry mar­ket, is what we call ‘val­ue-based pric­ing,’ ” Sum­mers said, “which is essen­tial­ly rec­og­niz­ing that this is a high-mar­gin poten­tial car, and not only pric­ing it that way when they put it on the lot, but also using that same val­ue-based approach when they appraise the car, as well.”

Sec­ond, Sum­mers touched on a team­work approach to inven­to­ry man­age­ment uti­lized by medi­um- to large-sized deal­er­ship groups.

It’s impor­tant for you, then, to rec­og­nize if it’s a “hot sell­er” in your mar­ket and then have a process in place to where that trade-in can be trans­ferred to your store as quick­ly as pos­si­ble.

Sum­mers point­ed out that sev­er­al groups are imple­ment­ing a “one team” concept,”“where from an inven­to­ry man­age­ment stand­point, they’re real­ly try­ing to opti­mize these oppor­tu­ni­ties. And in no place is it more impor­tant than in these high-mar­gin vehi­cles, par­tic­u­lar­ly the lux­u­ry CPO space.”

Next, Sum­mers point­ed to the ser­vice lane as a key place for acquir­ing these vehi­cles.

“The key thing there — par­tic­u­lar­ly for these high-mar­gin CPO vehi­cles — is hav­ing some­body at either the store lev­el or the group lev­el that real­ly owns over­all respon­si­bil­i­ty for look­ing out for these kinds of oppor­tu­ni­ties,” he said.

“For ser­vice lane, it’s more impor­tant at the store-lev­el; for in-group redis­tri­b­u­tion, you real­ly need some­body at the group lev­el that’s real­ly mon­i­tor­ing and proac­tive­ly iden­ti­fy­ing these oppor­tu­ni­ties,” Sum­mers con­tin­ued. “For ser­vice lane to real­ly work, you need some­body that this is clear­ly part of their job descrip­tion, and it’s some­thing that they lit­er­al­ly do on a day-to-day basis.”

Last­ly, Sum­mers offered this point of advice: have “good vis­i­bil­i­ty” into which whole­salers and auc­tions work best for acquir­ing cer­tain vehi­cles to meet your inven­to­ry needs.

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