ACV facts & figures
Automotive dealers must optimize their turnover to succeed in a competitive marketplace. This is especially important when it comes to trade-ins, as there's likely to be much more competition for pre-owned cars at the dealer level. After all, the number of used vehicles under 5 years old on dealer lots is predicted to shrink from 14.1 million to 12.7 million by 2025. This translates to 24% fewer vehicles available, compared to 2020.
A failure to focus on good vehicle acquisition strategies can quickly lead to an imbalance on the lot, lost opportunities, and lower revenues. If you feel that your dealership hasn't developed a successful vehicle acquisition strategy, here are some of the best practices.
5 Ways to Improve Your Vehicle Acquisition Strategy
1. Ditch the Retail-Only Approach
Many dealers may switch off and resist the potential acquisition of a trade-in if they don't immediately see a retail sale opportunity. Unfortunately, this can lead to lost opportunities, even if the vehicle is not "sellable" in the traditional sense.
Many dealers advertise the fact that they'll "buy any car" as a way of getting people in the door. Clearly, some consumers will be annoyed if this isn't the case, and they may vote with their feet. Instead, dealers could consider a wholesale exit strategy and prepare to bring in the vehicle at a realistic price.
Other dealers are so used to a "one in, one out" approach that they don't pay enough attention to people who simply want to sell. They're missing out on a potentially sizable market, with more than 1.4 million cars sold between private parties in the U.S. in July 2022 alone .
It could be a good idea to set up a separate buying center, available to those who have a vehicle to get rid of without buying another. Many consumers will find this approach attractive and more straightforward. They may now be willing to cross your threshold without the pressure of buying something to take away. Instead, they'll appreciate the transparency, and you'll bring in a vehicle that you might not have otherwise.
You then have two choices: recondition appropriately and sell with a retail markup or take the wholesale approach and send it to auction.
2. Be Honest and Direct With Sellers
Dealers may be less likely to cement a deal and buy a trade-in if they're not talking the same language as the seller. They may not explain their reasoning but simply give the prospect a trade-in price, which may be well below what the customer expects.
Instead, it's a good idea to walk around the vehicle with the customer and tell them why you have been unable to give them as much as they may expect. When you employ this vehicle acquisition strategy, you can go into detail and explain the technical reasons or the costs you might incur before you can sell the car to another client.
If you talk to a seller in plain language and let them understand why their vehicle isn't worth quite as much as originally thought, their position may soften. And you may be able to cement the deal, sell them a vehicle, and improve your performance at the same time.
3. Don't Beat Around the Bush
Many customers spend a lot of time online researching before visiting your dealership. According to Cox Automotive, used car buyers spend more than 10 minutes doing so, and 81% of them will visit at least two websites.
This suggests that they may also get offers from other dealers, so you should aim to follow up quickly whenever you make an offer. Otherwise, the "other guy" may beat you to the sale and capture the customer instead.
4. Remember the Opposition
In such a hot market, you need to give your very best offer upfront, with a convenient and easy way for a customer to move on to the next step. Remember that they are likely to do a lot of research online, which can lead them to digital retailing companies and other brick-and-mortar dealers.
When they finally arrive at your dealership, they may have several potential offers in hand. However, they might also be unlikely to tell you the details. This makes it critically important to present your best offer as the first solution.
And remember, if you don't give them a convenient and easy way to move onto the next step, it's even less likely they'll come back to you.
5. Foster a Good Relationship With an Auction
If you are going to buy more vehicles on an acquisition-only basis or as a subpar trade-in, you need to work with the best online car auction. ACV Auctions has access to thousands of dealers across the country who are looking for exactly what you want to sell, so you can reduce your time and maximize your profit.
We’ll give you the most up-to-date wholesale pricing available in the market, backed up by real-time data.
In addition, ACV can provide access to clean-title used cars for car dealers. These auctions are 100% online and run every day, so it's easy to find good vehicle inventory without needing to spend the time to travel to a physical auto auction.
Start the ball rolling by registering with ACV today.
1. The Ultimate Vehicle Acquisition Strategy. Retrieved on 30 August 2023 from: https://www.dealerinspire.com/trade-in-marketing-campaign/
2. Monthly used vehicles sales between private parties in the United States in 2022. Retrieved on 30 August 2023 from: https://www.statista.com/statistics/1325052/us-used-vehicles-sold-monthly-by-private-parties/
3. 2020 Cox Automotive Car Buyer Journey. Retrieved on 30 August 2023 from: https://b2b.autotrader.com/app/uploads/2020-Car-Buyer-Journey-Study.pdf.
Aug 30, 2023