Running a business can be both an exciting and challenging time, and used cars are an increasingly popular choice among consumers. According to Auto Remarketing Magazine, over 40 million used cars were sold last year. Despite the challenges of the global pandemic, the used car market in the US continues to be robust, and many are forecasting an increase in sales as consumers avoid public and group transportation.
So, how do you operate a used car business that’s built for success? Do you have enough space for displaying your cars? Are you near any other dealerships to get more customers? All these and more are things to consider when starting a used car business. The following are five tips for operating a successful used car business:
1) Find Your Niche
You’ve decided to sell used cars at your dealership, but do you know exactly which type? Finding your niche will help you stand out among other dealerships in your area and could increase your chance of success. You could have a used vintage dealership, a used luxury dealership, or maybe even specialize in used trucks and SUVs. The possibilities are endless! Do your homework, decide on the type of vehicles you want to offer, and calculate the volumes and margins you will need to turn a profit.
2) Ready Vehicles
Selling used cars at a dealership doesn’t mean just slapping an “as-is” sticker on the window. Each one of the vehicles in your inventory should have proper maintenance and thorough inspection. Any repairs that need to be made must be documented and kept on file. You need to invest in an efficient reconditioning process to make your vehicles presentable on the lot.
3) Offer Warranties
A lot of people coming to used car dealerships might think the available cars are “what you see is what you get,” and “what you can’t see may come back to bite you.” This is why it’s essential to offer some warranty options for customers. It provides them with a bit of a safety net, you with incremental revenue, and can increase the chance of them purchasing at your dealership.
4) Customer Service
Customer service is part of the car buying experience at a new car dealership, and it can be an important differentiator at your used car dealership. Provide your customers with a CARFAX or AutoCheck.com report or a free vehicle identification number (VIN) report. The more information you can provide about the car’s condition and service history, the better. Providing the honest data will show your customers that you respect their desire to know more about the vehicle and that you’re able to assist them in the process.
Another way to show excellent customer service is to follow up any sale with a “thank you” email or a phone call. It’s a great way to show that you weren’t helpful to them solely for the purchase of their car. Doubling down on customer service will pay back in referrals and repeat purchasers.
5) Location, location, location
Unless you are ready to compete in the growing virtual dealerships arena, all of these tips won’t matter if you don’t choose the right location for your used car dealership. Do you have enough space to display your cars on the lot and have a place to store vehicles if there isn’t any space left? Is there enough office space for you and your team? Is there a service department area for repairs? How close or far away is your dealership to others in the area? It might come as a surprise to you that being closer in proximity to other dealers increases your chance of drawing in more customers.
If your passion for automobiles is strong enough to drive you to help others find the right vehicle for them, running a used car operation can be both fulfilling and rewarding. The tips above will help get you started on your way.