The number of used vehicles with title discrepancies and problems may be at an all-time high, considering the five big hurricanes of 2004 and predictions of a very active hurricane season this year.
I am reminded of this as I watch the evening news showing hundreds of vehicles submerged to their roof lines in water. Where do these vehicles end-up after they are dried-out and cleaned-up?
I would bet that many are in the used-vehicle inventories of dealerships like yours across California, Iowa, Michigan and New York.
With so many of these vehicles being refurbished and entering the market, many industry professionals (including me) wonder when title-history reports will be a mandatory element of all used- vehicle transactions.
I am surprised automotive retailers and manufacturers have not done more to ensure such damaged goods do not enter dealer inventories.
Used-vehicle history reports can reduce risk for both the consumer and the seller. Many of today's report services offer buy-back guarantees or insurance policies to protect the buyers and sellers against problems, many discovered after the sale.
Vehicle-history reporting has come a long way. It is time it becomes an ongoing component of our business. The number of discrepancies caught today compared with just five years ago is amazing.
The data that is gathered today is highly advanced. It taps into many more sources — from state government to insurance company records.
Today's vehicle histories identify discrepancies in such areas as titles, odometer tampering, auctions, car rentals and major accident and flood damage.
A most valuable service a dealership can provide used-vehicle buyers is assurance that vehicles are free of title problems.
Research tells us:
- 84% of used-car buyers want vehicle history information, and see it as important or very important.
- 81% of used car buyers feel more confident in the retailer and the vehicle when the retailer provides the vehicle history voluntarily.
- Once buyers obtain the information, 97% are satisfied with the report.
I often hear dealers or used-car managers say, “I can spot a bad vehicle a mile away” or “I know my customers and the vehicles they drive, so I have no need to run a vehicle-history report.”
This is short sighted and naïve in light of today's highly litigious, data-driven consumer.
All it takes is for your dealership to get caught selling one unit with a tampered odometer or branded title.
A dealer friend unwittingly found himself faced with having sold a flood-damaged car to a local religious leader.
Luckily for the dealer, this didn't find its way into the local papers. In the end, however, the dealer bought back the vehicle, placed the client in another unit and absorbed a $9,000 loss on the transaction.
He told me it could have damaged his reputation in the community.
Ford Motor Co. appears to have recognized the value and risk reduction involved, and now requires all “Ford certified” vehicles to have a vehicle-history report run on them.
By making this a standard part of all transactions, it creates a stronger value proposition and provides protection for the auto maker and its dealers.
In the current environment, there is no excuse not to run a report on every vehicle about to enter your inventory. It identifies lurking problems, just waiting to trap you.
Matt Parsons is vice president-sales, marketing and portfolio management for ADP Dealer Services' Automotive Retail Group.