Used car supply is returning (steadily), but not fast enough to satisfy demand in every market. Shane Wood, general manager for Bruce Titus Automotive Group, experienced this first hand and knew something had to change.
Driving the news: Sometimes getting those used-car leads takes time, patience or even money, but it’s worth it, Wood said. “If you're going to have a strategy of buying cars, then you need to act like it,” he told Daily Dealer Live host Sam D’Arc.
So, Wood made it his mission to build a dealership-wide team of used car buyers, starting with an acquisitions manager.
He also pays out an average of $500 per unit to any employee that brings in a successful referral.
Salespeople are also eligible for bonuses on top of their commissions if there's a trade-in involved, Wood said.
The results: The group has doubled its trade-in capture rate from the low 30%s to 60% in the past six months.
Nuts and bolts: Wood said the single best source for used cars is Facebook Marketplace, but patience is required.
“It takes time to buy cars off of Facebook marketplace, because most people are trying to get a lot of money when they sell privately like that,” Wood said.
He said it’s no different than selling a car. It takes long-term follow-up and working back-and-forth with the customer, playing the long game.
Just “buy the effing car,” Wood said.
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Work the service lane, too: Customers who call Wood’s dealership get asked if they’re calling to buy or sell, and he phased in that same energy in service, too.
When advisors present the menu of options for a car, they’re also reminded of the dealership’s interest in buying.
And advisors won’t lose the deal if it becomes a sale/trade-in, Wood said, pointing out that it’s often a bigger ticket for them when it’s internal.
Worth the cost: Wood acknowledges that the strategy can raise acquisition costs, but said it’s worth it since they’re not buying cars to wholesale them, they’re buying to sell.
One car can become two deals, which could lead to more, and it becomes an extremely valuable transaction.
“We really think that each car represents a customer, and referrals, and be backs,” Wood said. “So we need to buy the effing car every time.”
The takeaway: New-car sales success often comes in cycles, but used-car strategy is controllable.
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