Lake Norman Chrysler Dodge Jeep Ram had what dealer Wesley McCullar calls "our own recession."
For the past two to three years, product gaps for the CDJR brands (owned by Stellantis), quality issues, and oversupply challenges crushed new car profitability across the network.
“The only way to survive was to double-down the focus and … ‘hit the rocket launcher’ for used cars,” McCullar told Daily Dealer Live host Sam D’Arc.
Driving the news: McCullar’s changes resulted in the store scaling from about 130-140 used cars per month to about 200, and volume increased about 70 to 80 units monthly YoY by focusing on volume first.
They began stocking used car levels aggressively early last year.
Early on, they leaned into auction purchases early, knowing they would have thinner front-end margins at first.
McCullar used a “super gross calculator” he built to show his team holistic per-car profitability across the entire store.
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Building supply: After leveraging auctions to boost used-car supply, McCullar built a team to buy cars off the street, centered around a salesperson with a knack for hunting deals but not closing them.
The team started searching for cars on Facebook Marketplace and Craigslist.
Currently, there are two buy center buyers purchasing about 30 cars each per month, or about half of the dealership’s used car inventory.
Digital assist: The store recently layered in Auto Hub, which uses AI-powered acquisition outreach via through service ROs where every customer-pay repair order triggers an automated appraisal offer.
This brings in about 10 to 12 additional acquisitions per month.
“Now most of those are customers that have chosen to upgrade their car…” McCullar said. “That's a double win for us.”
Worth noting: McCullar uses data from Reynolds and DriveCentric to help inform inventory purchases.
They lean toward vehicles with a fast turn history.
And those with high trade-capture probability.
The team values lifecycle value while avoiding aged specialty inventory.
Bottom line: Used cars are not a backup plan, they are a growth strategy. Dealers intending to focus more on used cars may need to stomach some counterintuitive steps, such as thinner front-end margins, while doing so.
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