“Certified Used Cars” are not something new that some creative genius has come up with in the last decade; nor is it the work of some consulting company. If we just look back in time, we can learn a lot from history.
I had the opportunity to be involved with Lexus, building the foundation from which the Lexus Certified Program was adopted. At the time, we did extensive research, looking back as far as we could. We discovered that “certified used cars” were being sold as far back as 1929. Of course, during the mid 50’s GM dealers sold “OK” used cars and Ford had “A-1” used cars. Since our participation with Lexus, I have been privileged to work with seven other certified programs, including the inception of Volkswagen and BMW.
In looking at certified today versus yesterday, nothing has really changed. There is reason for that—loss of customer confidence in pre-owned vehicles. The manufacturer’s primary concern is building the residual value of their vehicles. A successful certified program is key to that goal.
“What we should do is look back in time and learn from history. Nothing has really changed.”
Professional management of the used car department
During our research, we came across an article written in 1929 that I think is one of the greatest pieces of work that we have found from the archives of our industry. The text reads:
“No business can hope to be successful in this age of competition unless it is organized. Lest this be misunderstood, it should be stated that small businesses need organization as well as larger ones. Organization does not necessarily mean large offices, much red tape, many employees, and this is a pit into which many companies have fallen. It simply means to plan work so that it can be performed by a minimum number of people with a minimum of friction, and a maximum of profit and satisfaction to those being served. Some business institutions are over organized while others are under organized. The size of the business and its volume will determine the size of the organization. But no matter the size, every used car department, to be successful must meet the following requirements.”
“The buying and selling of used cars is the most difficult and important phase of the dealer’s operation. Proof of this will be seen when consideration is given to a connection with the selling of new and used cars.”
Conditioning for delivery…simple
Marketing…requires ability of high order
Conditioning for delivery…involved
Marketing…requires ability of highest order
“In view of the higher order of management demanded by the used car operation, it would seem logical that the highest priced and most competent man of a dealer organization should be directly and actually responsible for this department. In small operations, this should be the dealer. In larger ones, it should be the sales manager.”
“In most cases, proper planning will enable the dealer or sales manager to handle both new and used departments. It may be felt that it would be difficult for one to devote time to this major task of buying and selling used cars without jeopardizing the new car sales effort. Quite the contrary is true. Today, almost every sale involves a trade, and in buying the used car, it can be determined quickly whether or not the new car salesman has properly sold the new car. With this knowledge, the dealer or sales manager will know the precise points of weakness or strength of his men and where they need training. Furthermore, the closing of a sale logically follows the giving of the purchase price. The sales manager who is personally doing the buying is right on the job at the psychological moment to help the salesman.”
Well, there you go. This was written over 80 years ago. Can anyone tell me what in the world has changed? Now everyone wants to get the latest and the greatest tech tool, but it still boils down to the same thing it was when we had nothing more than a horn and a key. It’s just plain common sense.
Tim Deese is the chairman and founder of Progressive Basics. For more information, visit www.probac.com.
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