The Right Plan & Tools Can Help Dealers Sell More Pre-Owned Cars

Without a doubt, technology is more prevalent in the automotive industry for consumer shopping. Online and mobile technology has especially given consumers as much power as they’ve ever had in terms of doing research and negotiating the best possible price on a new car. This has reduced profit potential for dealers selling retail, placing more emphasis on the need to leverage technology to find new ways to remain profitable.

In response, many franchise dealers are looking to beef up their pre-owned sales activity as a result of still-solid profit potential. Part of a dealer’s ability to drive profit at pre-owned is having the right strategy of finding additional units for the car lot.

This is critical because inventory levels are returning to more healthy wholesale levels, and dealers aren’t scrambling to find used cars like they were three-four years ago. This is being driven by three areas:

  1. With annual new-car sales expected to reach 16.1 million units by the end of 2014, this has brought back more used inventory to the dealership since approximately 60% of every sale comes with a trade-in.
  2. Depreciation levels are still at all-time healthy levels. Black Book estimates that 2014 average depreciation will be just 13.5%, still below normal pre-recession annual averages of between 15% – 18%.
  3. Lastly, Black Book also anticipates 900,000 leases will return to dealers in 2014. This represents prime pre-owned inventory ripe for remarketing at a decent profit level.

Before dealers flip the switch to sell more pre-owned cars, they need to have the right plan in place. This is important, because of the convergence today in how used vehicles are bought and sold through wholesale and retail channels—in online and offline environments. The goal is naturally to bring in inventory at the right price and expedite your days to turn, and technology can help facilitate this process.

Mobile technology allows dealers to see a 360-degree view of their complete inventory lineup. New tools offer dealers a multilayered look at their inventory so they can make quicker decisions on cars that they want to bring onto the lot, or equip themselves with information that helps them sell a car at the right profit margin.

Access to this real-time information is critical, because of the speed at which today’s industry operates. Dealers can see how pricing adjustments impact their purchase and sale prices in real time, whether they’re deciphering wholesale, retail or trade valuations.

This technology also has the ability to mitigate off-lease inventory risks. As franchised dealers look to shed more off-lease inventory, mobile technology can provide them with the right valuation information so that they can price the car competitively enough to maximize potential.



Mobile app features allow dealers to capture a multitude of vehicle details at auction, such as vehicle color, price, condition, photos and even videos, and share with pre-determined retail buyers in real time. This activity helps the franchise dealer manage inventory, sell at the right profit level and elevate customer satisfaction.

It is also important for dealers to find the right market value for the vehicle, particularly if a dealer is looking for market value in a specific region of the country. Knowing the right sale price in a different market for a different buyer can further elevate profit potential. Dealers also have access to full vehicle history reports through mobile app technology so they can get a better read on conditions to help make the right sale.

Dealers looking to increase their pre-owned inventory and sales potential are certainly skating to where the puck is going—per the famous Wayne Gretzky line. But as much as this strategy is timely and smart, it’s only the right thinking if the right plan is in place, and the right tools are utilized. When dealers put all of this together, they’re able to think smarter and faster, and realize higher profits.

Mike Williams is Vice President of Mobile and Direct Sales for Black Book, a leading provider of timely, independent, and accurate vehicle pricing information. The company offers innovative technology such as its Black Book Digital mobile app that allows dealers to think faster, leverage valuation data in offline environments and connect across the entire decision channel to maximize sales potential. For more information visit www.BlackBookAuto.com.

Mike Williams

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