Mohammad Khan Yusufzai is Masters in Management, specializing in Economics, Finance and Marketing, with corporate & lectureship exp.
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What’s the new abnormal for the used car market in the US?
For the first time in history, used cars are commanding higher prices than their brand-new, factory-fresh counterparts.
As a used car dealer, you might think, “Alright! This is a great time for making huge profits.”
Reason is high demand paired with an acute shortage of used cars. Unless you have a solid stock of used cars in your used car dealership, chances are your profit will remain the same, if not worse.
What happens when an unstoppable force meets with an immovable object? Never in your dreams would you answer “skyrocketing pre-owned car prices”.
But why is this happening in the first place?
The answer is:
classic Demand-Supply mismatch.
The supply of new cars is very low. There are a variety of factors for this supply shortage. But the one major reason is the current microchip shortage.
Due to this shortage, used car dealers are not getting any addition to their stocks. So used car dealerships are holding on to their existing stocks.
Meanwhile, a large section of new car buyers cannot find new cars they want. So they are now shifting their attention into the used car market.
This supply chain bottleneck paired with an increase in demand is is the reason for this sudden and abnormal rise in pre-owned car prices.
What you can do in this situation to ensure maximum profits for your used car dealership?
Well here are some tips that will help you in this abnormal situation. Moreover, you can revisit these advices to make yourself the best-used car dealer in the area.
Website is Digital Showroom of Used Car Dealership
Car buyers today are very smart. They spend a considerable amount of their time online. They thoroughly compare different websites and then decide to either make a call or visit your dealership.
As an auto dealer, if your website is too generic, ugly, or confusing, you are sure to lose a lot of customers that way.
Make sure your website ticks all the correct boxes. Ideally, it should be
• Easy to navigate with simple language
• Mobile optimized (people spend most of their time on the phone)
• A lot of high-quality images of cars you are offering
• What are the financing options available in your dealership?
• How does your dealership stand out from others? ( testimonials, reviews, unique/vintage cars)
Use Specialized Accounting Software for Your Used Car Dealership
You deal in used cars. So it’s sensible that you keep your efforts limited to selling cars.
If a lot of your time is spent on book-keeping and handling paperwork, then it’s time for you to invest in robust accounting software.
Accounting software saves a lot of your time. On top of that, you get accurate reports, all your accounts are properly synced and statements look more professional.
Coming tax day, all these will come in very handy. And customized accounting software can handle a lot more than all that.
OnlineCheckWriter.com, for instance, is an accounting software especially made keeping in mind the needs of auto dealers. You can print checks, invoices, manage your vendors, payrolls, and do ACH and RTP transfers.
Quick flips through Used Car Dealership
Quick flipping or car flipping can be a highly rewarding niche for you. If you have the expertise to work and repair cars then you should consider it.
What you do essentially is find cars that are undervalued, mostly because of some minor issues with them.
You then do the much-needed repairs or modifications on them. And finally, sell them at the profit.
However, you must have a thorough knowledge of the market. If you understand the ins and outs of the industry well you can make decent profits through flipping cars.
Sell Parts and Accessories Online
If you already have a website for your used car dealership in place then you can easily integrate selling parts and accessories there.
It is easier than ever to implement an e-commerce store on your website.
Selling online is a proven way to grow geographical reach, move more inventories, and provide better customer satisfaction. And it will give a more professional and appealing look to your auto dealership.
Prospective customers will come and see that you offer not just cars. Your auto dealership offers everything that they might need after buying a car from you.
Plus, you can ensure regular profits through these funnel during the off-season of used car markets.
Don’t overlook Strong Reputation
Buying a car is still a big thing for most people.
Consider a teenager buying his first car. Or a working mom with enough savings to purchase a vehicle that’s suitable for her family.
Ripping any customer off is a sure way to permanently lose your business.
All it takes is one customer or visitor to have a bad experience. And through word of mouth, your used car dealership will have a poor standing.
Be sure that this bad experience will soon be out to most of your target customers in today’s digital world.
Therefore, stay away from the pushy and manipulative attempts for selling a car. You don’t want to have a greasy oiled salesman who comes out very desperate just to sell.
If you are tirelessly attempting to lure customers with your poor stock, you will permanently lose them.
Instead, listen to your customers more. Be honest with them and genuinely try to offer those products that they are actually looking for.
Your used car dealership will surely grow and develop over the years.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2022 Mohammad Khan Yusufzai