Like people, used cars have life histories. Call them “auto-biographies.”
So in automotive remarketing, the onus is on dealers to tell vehicle stories descriptively and creatively, not a bland list of specs that people know anyway, says industry veteran Bob Grill.
Well-told stories sell vehicles faster and fetch higher prices, especially for “high-value” vehicles that deserve praise, Grill said during a “Used-Car Super Session” webinar hosted by the American International Automobile Dealers Assn.
“In marketing, make your vehicle stand out”, Grill (photo below left), a senior Carfax executive, advises dealerships. “Make it the obvious choice.”
He urges dealerships and their marketers to “stop filling in the VIN” when describing vehicles for sale online or elsewhere.
Vehicle Identification Numbers provide a wealth of information about a particular vehicle, including its individual features and specifications.
But some of those descriptors are superfluous for marketing purposes, says Grill. “Nowadays, every car has air conditioning, cruise control and power steering, so there’s no need to include them (in an ad). Do not fill in the VIN. I know it’s convenient, but it’s less effective. How you market matters.
He quotes a well-made ad. It reads in part:
“I just released this beautiful, well-maintained, single-owner 2019 Honda Civic. We rented it from its first owner. Our Honda certified mechanics have taken care of it throughout its life. We know this car better than anyone.
“Bring personality to the car,” says Grill. “Good solid descriptions make it stand out. If you charge more than the average, you must explain why.
Grill and retired AutoNation consultant and vice president of sales Mike Rossman team up during the webinar to offer advice on best practices for used car retail.
“Each used vehicle has a unique story and value,” says Grill.
Using data collected by Carfax, he and Rossman cite various factors that increase or decrease a vehicle’s value. For example, they use a 2018 Chevrolet Camaro RS Convertible with 39,000 miles (62,400 km) and an average market retail price of $32,600. (See table below).
The price is higher than that to varying degrees if the vehicle is a certified pre-owned ($34,900), accident-free ($33,500), well-maintained ($33,000), and has had one owner ($32,000). $800).
Conversely, the price falls below the average of $32,600 if the vehicle suffered minor damage ($32,100), was a rental ($31,600), was in an accident ($31,200), had several owners ($31,000) or – a killer – has a trademark title ($22,000).
A mark title occurs when a vehicle sustains serious accidental damage and is repaired, but the insurer “marks” it as salvaged.
This stigma on file more than anything else diminishes resale value, even if a vehicle has been professionally repaired and is running well.
Grill and Rossman also offer advice to dealers on the best ways to source used car inventory during tough times like today’s U.S. vehicle market, where demand exceeds supply.
This inventory shortage stems from a global shortage of microchips that has forced automakers to cut production of new cars. A ripple effect is that used vehicle inventories are also lower than normal.
Rossman says dealer service customers are great sources for high-quality used vehicles.
This involves offering to purchase vehicles that customers bring in for service. “To get these vehicles, know what’s going on in the aftermarket,” says Rossman.
He notes that dealership management systems indicate which vehicles need to be serviced on a given day. “Check your DMS daily to see which service cars arrive that you would like,” Rossman (photo, left) said. “You have the maintenance history. You know the car.
Grill adds: “Without a doubt, the vehicles with the highest value and which sell the fastest come out of the service department.
Non-lease vehicles are another source that dealerships rely on to replenish their used car lots.
The original lease dealers have a right of first refusal as to whether they wish to purchase and resell a non-lease return. In today’s tight market, most dealerships source virtually every lease return.
“Lately the dealers have been like, ‘We’re keeping them all,'” says Grill. “That’s the way to go these days.”
Nationally, the day supply of used vehicles has dropped dramatically, to less than 50, says webinar participant Chris Frey, senior director of industry insights at Cox Automotive. The new car day supply is worse, at less than 40.
Frey expects a generally strong spring selling season. Due to the current supply and demand situation, he expects prices to remain high “but less than last year’s massive prices.”
Steve Finlay is a retired editor of Wards. He can be reached at [email protected].