Like people, used cars come with life stories. Call them “auto-biographies.”
So, in automotive remarketing, it behooves dealers to tell vehicle stories in ways that are descriptive and creative, not a bland listing of specifications that people know about anyway, says industry veteran Bob Grill.
Well-told stories sell vehicles faster and fetch higher prices, especially for “high-value” ones that are worthy of the praise, says Grill during a “Used-Car Super Session” webinar hosted by the American International Automobile Dealers Assn.
“In marketing, make your vehicle stand out,” Grill (pictured, below left), a Carfax senior manager, advises dealers. “Make it the obvious choice.”
He urges dealers and their marketers to “stop VIN populating” 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, Grill says. “Every car today has air conditioning, cruise control and power steering, so there’s no need to include those (in an ad). Don’t VIN populate. I know it is convenient, but it is less effective. How you market, matters.”
He cites a well-done ad. It reads in part:
“Just made available this beautiful, well-maintained, one-owner 2019 Honda Civic. We leased it to its original owner. Our Honda-certified mechanics have taken care of it its whole life. We know this car better than anyone.”
“Give the car personality,” Grill says. “Good, solid descriptions make it stand out. If you are going to charge more than average, you’ve got to explain why.”
Grill and Mike Rossman, a consultant and retired AutoNation vice president-sales, team up during the webinar to offer best-practice tips for retailing used cars.
“Every used vehicle has a unique history and a unique value,” Grill says.
Using Carfax-collected data, he and Rossman cite various factors that increase or decrease a vehicle’s value. For an 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 chart below).
The price is higher than that by varying degrees if the vehicle is a pre-owned certified model ($34,900), accident-free ($33,500), well-maintained ($33,000) and had one owner ($32,800.)
Conversely, the price drops below the $32,600 average if the vehicle had minor damage ($32,100), was a rental ($31,600), was in an accident ($31,200), had multiple owners ($31,000) or – a killer – has a branded title ($22,000).
A branded title results when a vehicle sustains serious accident damage and gets repaired but the insurer “brands” it as salvaged.
That on-file stigma more than anything else lowers the resale value, even though a vehicle may have been professionally repaired and functions fine.
Grill and Rossman also offer advice to dealers on best ways to procure used-car inventory during challenging times such as today’s U.S. vehicle market, where demand outpaces supply.
That inventory shortage stems from a global microchip shortage that forced automakers to cut new-car production. A ripple effect is that used-vehicle inventories are lower than normal, too.
Rossman says great sources for obtaining high-quality pre-owned vehicles are dealership service customers.
It’s a matter of offering to buy vehicles customers bring in for service. “To gain these vehicles, know what’s going on in the service department,” Rossman says.
He notes dealership management systems indicate what vehicles are scheduled in for service on any given day. “Check your DMS daily to see what service cars are coming in that you would want,” Rossman (pictured, left) says. “You have the service history. You know the car.”
Grill adds, “Without question, the vehicles with the highest value and that sell the fastest come out of the service department.”
Off-lease vehicles are another source dealers rely on to replenish their used-car lots.
Origin-of-leasing dealers have first-refusal rights on whether they want to buy and resell an off-lease return. In today’s tight market, most dealers are procuring virtually every lease return.
“Lately, dealers have been saying, ‘We keep them all,’” Grill says. “That’s the way to go these days.”
Nationally, used-vehicle days’ supply is down dramatically, to under 50, says webinar participant Chris Frey, Cox Automotive’s senior industry insights manager. New-car days’ supply is worse, at less than 40.
Frey expects a typically strong spring selling season. Because of the ongoing supply-and-demand situation, he forecasts prices will remain high “but less than the massive prices of last year.”
Steve Finlay is a retired Wards senior editor. He can be reached at [email protected].
