Auto dealerships get creative with acquiring inventory

It’s a proven double game among car dealerships.

Customers trade in vehicles and buy new ones. The dealers, in turn, sell the trade-ins. The new car and used car departments benefit from this.

But dealers are seeing a trend lately that is troubling them. Many customers don’t arrive with trade-ins because they’ve already sold their vehicle to a willing buyer during these times when demand for new and used cars exceeds supply.

“It’s a volatile market,” says Randy Barone, an industry veteran. “Customers not coming with an exchange is an alarming concern for many dealers.”

He is a former franchise dealer who now serves as vice president of business development at MAX Digital, an inventory management and pricing software provider.

His company, owned by ACV Auctions, works with dealerships to increase trade ratios and uses a variety of techniques to acquire vehicles from consumers, with or without a trade-in.

“We train dealers to buy cars directly from consumers,” says Barone (photo below left). “These are usually the most sought-after vehicles because they come with a ‘storybook’.”

This means knowing the seller who usually provides service and maintenance records, which give an idea of ​​the condition of the vehicle. A saying from the second-hand world: “If there is a story, there is no mystery.

ACV and MAX Digital have developed non-traditional ways for dealers to obtain vehicles directly from consumers.

This includes concession events that resemble auctions. Presented as live assessments, they use digital technology to reach a wide range of “bidders”.

Here’s how it works:

Through marketing, dealerships reach out to potential sellers, telling them that their vehicles can be valued at a dealership auction. The bidding audience includes wholesale vehicle buyers who may be in-store and/or online through a digital platform.

Bidders indicate how much they would be willing to pay for each car in your car’s value events.

When the auction is over, the host dealership has the right of first refusal to purchase the vehicle. Otherwise, this option goes to the highest bidder.

“A dealership had 68 vehicles that had been bid on,” Barone explains. “Instead of one person at the dealership evaluating a vehicle, multiple people are involved. Customers watch the process. This is a great way to acquire stocks.

Another new vehicle acquisition technique implemented by ACV and MAX Digital involves training showroom salespeople to purchase vehicles from individuals. It’s a kind of role reversal.

“You pay them not only to sell cars, but also to buy desirable ones that will sell well and quickly,” says Barone.

A solid inventory is essential to successfully sell used cars. It’s better to stock 50 fast-moving vehicles than 100, if only half of them are spinning fast, Barone says.

That means getting vehicles that, among other things, “have the right color and contain the right gear sets” as opposed to garden variety units from rental fleets, he says.

Using inventory management software to properly price them is also essential, he says. “The right car at the right price is amazing. The right car at the wrong price is always the wrong car.

Steve Finlay is a retired editor of WardsAuto. He can be reached at [email protected].