Dealers keeping customers keen while running lean

A complex problem facing many dealers at present is the delicate balancing act of selling lots of used cars, keeping stock levels low to combat the falling values of cars and maintaining precious cash flow. Traditionally at this time of year dealers, re-energised by consumer activity and sales promotions, will go on a re-stocking mission. But with the current uncertainty and lack of dealer credit facilities caution and “running lean” are the buzzwords. Potential customers, however like to look at their local dealer website and see greater choice and will easily be turned off by a small listing of used cars on display.
Franchised dealers are combating this by offering stock which is actually held by manufacturers. When a customer inputs their requirements into their car search it will bring up a car which looks as if it were in the local dealers stock but actually residing at a holding compound somewhere in the country. The manufactures will have had the car prepared and photographed so the benefit to the dealer, of course is the total absence of stocking costs.

This is a very clever tool for both the manufacturer and certainly the dealer – and you can obviously see the advantages – and, if explained correctly, there are also big benefits to the customer. If the car has a full description and the dealer is sure of the preparation standards then a deal can be completed on a ‘subject to viewing’ basis meaning; if the car is not as described or doesn’t contain the spec shown on the description the customer does not have to commit to the purchase. The dealer can, as a result of not having to stock the car and bear the associated costs, commit to a better deal for the customer knowing that the money he will pay the manufacturer would only be out of his account for a matter of days before the customer pays him for the car, so in effect everyone’s a winner.

Even the manufacturer, by using the website to re-market these used cars to their own dealer network, can increase volumes without having to lean too heavily. We have often reported that this kind of car purchase will increase and as multi-image and showreel descriptions increase the standards accordingly car buyers will feel more confident in making a purchase in this way. This means the dealer can significantly reduce his stock holding and therefore his financial exposure and when a customer enters the showroom they can immediately gain access to the virtual showroom as well.

Some bright spark still needs to solve one problem however, how do you take a virtual test drive.