As more used car inventory becomes available, independent dealers need to make sure they are making informed purchasing decisions. Not only do you want to select vehicles that are going to sell quickly, but you also need to make sure you’re purchasing vehicles at a price that will allow your dealership to turn a profit.
By making strategic purchasing decisions and utilizing a floorplan, independent dealers will be better positioned to navigate a variable used car market. Here are some ways to make sure you’re making the best inventory purchases for your independent dealership.
Pay Attention to Vehicle Price
With inventory availability increasing, so will the competition for the vehicles in hot demand in your market. It’s important that you take time to research every vehicle you purchase to ensure that you’re not overpaying for your inventory.
When there are sudden shifts in pricing, a vehicle’s value could increase or decrease overnight. Keeping that in mind when purchasing inventory and taking advantage of any auction promotions or trade-ins to help keep the price down will ensure you’re making strategic purchasing decisions.
Don’t Let Repairs and Body Work Eat Away at Your Profits
No matter where you source a vehicle from, if it needs some extra TLC, those expenses will impact your overall sticker price. So, make sure any additional costs are factored in when purchasing a vehicle.
Ideally, have someone from your dealership inspect the vehicle in-person before you purchase it, but if that’s not possible, review the condition report carefully to avoid buying a vehicle that will need major repairs or refurbishment.
Ask your Floorplan Rep for Guidance
If you have a floorplan through a provider like Kinetic Advantage, your account rep can help advise you on how to keep inventory rolling off your lot. Think of them as a partner who is knowledgeable about your market and wants to make sure your dealership is as successful as possible.
Make sure you check in with them regularly and discuss any challenges you’re facing so they can help you figure out solutions and avoid future obstacles.
Use a Multi-Channel Purchasing Approach
Getting the best quality used vehicles at a competitive price is easier when you utilize different sourcing options. Don’t just rely on one source, such as in-person auctions, to purchase your inventory; diversify your sourcing as much as possible to get the best vehicle price. There are more inventory sourcing options than ever, including wholesale, online platforms, off-street purchases, and trade-ins, so don’t be afraid to cast a wider net when you’re ready to purchase more inventory.
Pay Attention to Your Turn Times
If you suddenly see your floorplan turn times increasing, take some time to figure out why. It could be that your customers’ preferences are changing and you need to make some changes to your inventory selection.
Or maybe, it’s time to ramp up your advertising or offer incentives, such as free car washes or oil changes to bring more customers to your car lot. Turn times are one of the quickest ways to know if your current inventory and sales process is working, so it pays to keep a close eye on it.
In a variable market, vehicle prices are going to constantly be in flux, but that’s when your floorplan provider can help give you a leg up. Your Kinetic Advantage floorplan not only provides you with a current snapshot of the status of all your floored inventory, but your rep can also provide you with industry insights to help you make the best vehicle purchases.
Don’t have a floorplan with Kinetic yet? Apply now!
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