Proper Inventory Allows Success in Challenging Special
New Tool Makes it Easy to Determine What and Where to Buy
I have been joined at the hip with the special finance industry now for 19 years, 12-plus years spent as a dealer with heavy focus on SF. My first store entered SF while the U.S. auto industry was trying to fight its way out of the last recession. I have seen booms and busts, albeit not as severe as what we are currently experiencing. Throughout it all, one of the amazing consistencies in SF has been the inability of the majority of dealers to stock the proper inventory to succeed.
Every few years it seems that a new “trend” has occurred and ”suddenly” a dealer who normally does a decent job with their inventory hits a brick wall, or so they say. That is usually when the “BS” meter on my desk goes off, resulting in the raised eyebrow some of you have seen.
Lately, I have been getting more calls and e-mails telling me the SF industry is dead and one of the reasons is that “you just can’t buy cars anymore that work with the finance companies.” Inevitably, the calls or e-mails are either preceded or followed by another friend/client telling me they are having a great month in the SF business—in the same market. Ethics of course don’t allow me to tell someone that so-and-so down the street or across town who is using the same finance companies is doing terrific and, oh, by the way, is also successfully buying the necessary inventory to make it all work.
In case you haven’t found it, our new sister Web site AutoDealerPeople.com went live a few weeks ago. (It is a social network tailored just for sharing perspectives and opinions from auto dealers all over the country.) Recent exchanges inside my special finance discussion group, along with a second discussion in the Forum, exemplify my earlier comments. One talented dealer from a large metro market lamented that he was unable to buy vehicles that worked for SF – everything was above book. A second talented person from the very same market was able to buy 20 vehicles that same day.
It has been the same for at least two decades, and very likely will be for many, many more. Admittedly, I have not bought a car through the auction lane in nearly seven years, but I heard the same stories when my stores had to buy 100-plus used vehicles per month. Somehow we always found them. You can too.
The key is as simple as knowing what to buy and where to find it. That may sound overly simplistic, but that is it, plain and simple. In my dealerships, we had a very defined process that we used to identify and purchase vehicles. Over the years I have gone to great lengths to teach dealers and their buyers how to purchase inventory for SF. Some catch on quickly. For others, it simply becomes one excuse after another. The excuses just got tougher to make and my workshop sessions covering inventory just got much easier.
What I am referring to is a new tool that makes the whole process a no-brainer. You see, up until now, to purchase vehicles for SF, you first had to know what finance companies were available and being used in your market, which vehicles were selling in your market, which ones were available at auction, and then finally, which ones allowed you the greatest gross profit opportunity. That’s certainly not impossible, as I, and countless others, managed to do it for years and still do. What it entailed though, was this: before every auction we attended we would get the run list, find the vehicles that fit the age and mileage parameters, book them out, then go inspect them. It was a tedious task, but it always allowed us to have the right inventory in stock for SF, no matter what. That is a process in which many used car managers or SF managers don’t want to participate, as it requires a lot of patience and advanced preparation. The good news is there’s now a tool that will do all this for you, and best yet, it's affordable. As a result, I couldn’t be more excited about it, and seldom does that happen for me in the SF business.
There is a new company call Vuenu Media. It is owned by Devin Weisleder (formerly of InterActive Financial Marketing Group), and has been created with the help of someone whom I have known and worked with for nearly a decade, his brother, Travis. They have created a patent-pending product that pulls data from all the auction sales, all the appraisal books, all the retail sales data, all the lien holder data and all the upcoming auction run list data; then, all data is merged into a report that can be sorted by virtually any parameter you want for your market.
The report will tell you the five cars (with minimum sales volume levels) that have sold in your market in the last month with the highest gross profit opportunity, by finance company, and by model.
Better yet, you can also use the tool to sort the data by finance source. Need vehicles to work with tough-to-buy-for programs like CAC, Westlake, or Drive Solution? Vuenu can sort it by finance company and tell you what year, make and model vehicles to buy, what to expect to pay, what you can expect to gross and where there will be quantity of those vehicles running at auction the upcoming week.
I am sure my description is not doing the product justice, but I am telling you, after all the thousands of vehicles my dealerships and I bought and the painstaking process we used to adhere to, this is a no brainer!
Making just one mistake when buying a vehicle will cost you much more than the cost of the product. Those of you reading this know I seldom, if ever, endorse a product or service. This is one time, however, that the product is so good (and there is no one else providing this service) that I believe if you can't buy cars using this, you never will be able to.
In the end, I don’t care what methods you use as long as you do something to successfully identify your market, what finance companies serve it and what vehicles work best with those companies, and then inventory the proper vehicles to work with that market. You can deny that is possible all you want, but your competition is delivering vehicles every day with gross profits approaching $3,000 per unit. You simply must work smarter.
Yes, the SF market has toughened over the past year. It may even continue to do so. One thing hasn’t changed; your inventory is your lifeblood. Unless you simply feel it is too much work to take advantage of the gross profits that still exist in SF for virtually any dealership, you must rededicate yourself and your store to ensuring you have the correct inventory on hand to match your finance companies and your customers. You can do so regardless of whether you do it the old-fashioned way or use Vuenu’s tools. At this critical junction in the retail auto industry, it’s important to make sure that you just do it!
If you still have questions on inventory, e-mail me at Greg@AutoDealerMonthly.com. I will be more than happy to help you any way I can.
Until next month,
Vol. 3, Issue 2