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- 4x'ing used car sales: This franchise dealer's ultimate pre-owned playbook
4x'ing used car sales: This franchise dealer's ultimate pre-owned playbook
Featuring JR Toothman, Dealer Principal at Toothman Ford
Welcome to another edition of the Car Dealership Guy Podcast Recap newsletter.
In this episode, JR Toothman, dealer principal at Toothman Ford, shares how he doubled down on used cars, sharpened his acquisition process, and built one of the strongest volume-drivenoperations in rural West Virginia.
1. Change is the nature of the business.
Disruption in automotive isn’t new, so don’t be discouraged by new challenges.
“There's always been things that disrupt supply chains. There's been things that disrupt the market. But I think now with the technology, things are just happening faster.”
Being able to adapt is key in this business.
2. Don’t be quick to dismiss unproven ideas.
At one point, a lot of people thought the internet was a fad.
“There was a lot of fear (that) it was going to change the industry…eliminate the dealer body.”
Toothman Ford leaned into the internet early on, which enabled the dealership to grow in areas that others couldn’t.
3. Recognize the importance of data.
The “Amazon way” of doing business is changing how dealerships need to think.
“Data is the currency right now. And the way we can leverage that data to make our operations more efficient is the big thing. You can dive into it so many different ways and utilize it.”
Sometimes it can be overwhelming, but it’s a lane that dealerships should be pursuing.
4. There’s value in knowing the political side of the business.
As Chairman of the West Virginia Dealers Association, JR has learned a lot about the business.
“I never really associated with all the politics… involved in making the legislation, which obviously directly affects us as businesspeople. So, getting to see…behind closed doors how a lot of that stuff works, has been a very… eye-opening.”
Those relationships can help navigate a lot of challenges in the business.
1. OPENLANE - The world’s best online dealer marketplace for used cars, bringing you exclusive inventory, simple transactions, and better outcomes. Learn more at openlane.com.
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3. CarGurus - maximize your performance on the #1 most visited car shopping site in the U.S. With data-driven intelligence on what to buy, how to improve the visibility of your listings, and how to optimize pricing, CarGurus will help drive revenue at every stage. Learn more insights.cargurus.com/cdg.
Similarweb, Traffic Report (Cars.com, Autotrader, TrueCar, CARFAX Listings (defined as CARFAX Total visits minus Vehicle History Reports traffic), Q4'24, USA. CarGurus analysis of US dealers that changed a vehicle price based on NBDR recommendations compared to vehicles without an NBDR- informed price change from Nov 2023 through Dec 2024, finding that dealers that made NBDR-price informed change see a 42% median increase in VDP views per day. Market Probe International, blinded survey of 600 dealers, Aug 2024. Based on 313 dealers who pay for at least two listings sites.
5. Social media is essential in today’s market.
Some of Toothman Ford’s biggest recent investments have been in social media.
“There's a trust factor associated with it, because to my kids, who have grown up in this streaming world…they see on social media sometimes are just as big as stars as the people they see on Hollywood screens.”
The inherent business model of social media enables sales associates to be influencers in the market.
6. Your success doesn’t have to be relegated to one brand, even as a franchise dealer.
Toothman Ford avoids a lot of the volatility associated with selling one brand by selling pre-owned vehicles.
“Last month we did 172 used cars and eight new. I'm controlling my own destiny. It's got its own problems, as far as the flow of being able to acquire that many vehicles, to be able to service that many vehicles. But…I'm not…at the mercy of a particular manufacturer.”
Toothman Ford offers a variety of brands, including Toyota, Honda, and Chevy.
7. Standing on a solid business model is key.
Acquisition is the blood flow of Toothman Ford.
“A profit is made when the car is acquired, not when it's sold, is the way I see it…We try to acquire as much off the street as we can. That's like an all-you-can-eat buffet…We try to acquire about 40 to 50 (vehicles) a month.”
The approach is heavily dictated by the dealerships’ local consumer base, which falls in the lower income bracket.
8. Necessity breeds innovation.
JR was forced to find its niche in the market to sustain its operation.
“I was backed into a corner and thought and…started to (see) as, I put cash in the bank—if I buy used vehicle; run it through parts and service; then sell the vehicle; pick up my F&I, my front-end gross, a dock fee—I can survive. A lion survives by being a lion, a mouse by being a mouse.” "
9. Every hurdle is an opportunity to learn and grow.
One of Toothman Ford’s biggest challenges early on was the roller coaster of used car sales.
“We would have the great month, then the not-so-great month, because as your inventory gets depleted, then you're…kind of starting over that following 30 days.”
To address the issue JR launched a new business with a former economist for Cox—focused on acquisition.
10. Be open to exploring new opportunities in the business.
JR recently opened a factory outlet featuring all pre-owned vehicles near West Virginia University.
“We've only been open there about 15 days, and we've already sold about 25 to 30 used vehicles out of that spot…It is a good drive-by location, but we've also done some traditional radio.”
Never say never.
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