To buy, or not to buy: that is the question … but maybe the better question is: “What are the top four things Used Car Inventory Managers rely on to purchase the right vehicles?”
Traditionally, Used Car Managers have relied on experience and intuition—a general understanding of which cars are “right” for the dealership based on one’s years of experience with the dealership.
Fast forward to today, a time when we have access to virtually all of human knowledge from a device that fits in your pocket. If you had access to deep, detailed information about which vehicles are hot right now—not only at your dealership but across your region—wouldn’t you want to bolster your experience and intuition with real information?
Top 4 things Used Inventory Managers rely on to purchase the right vehicles
Although we cannot place a high enough value on managers’ experience with the dealership and industry, there are much more scientific ways to approach inventory management decisions. Used Car Inventory Managers’ success is measured by margins, volume and turn times, so let’s examine the top four tools that can optimize your Used Car inventory mix.
1) Dealer Management System data
Mining Used Car data from your Dealer Management System (DMS) gives you detailed information about which vehicles have historically sold well. Maybe you sell a lot of Ford pickup trucks, or maybe it’s the Toyota Camry, or an Audi A6. Whatever it is, your DMS tells you what your customers have wanted in the past, your margins on previously sold vehicles, average days in stock, and so on. It’s a great, in-depth resource that is the first step in optimizing your Used Car inventory.
2) Market data
Third-party applications are available to tell your Used Car Inventory Manager which vehicles are most popular. This type of information is useful because it separates your store’s track record from the rest of the dealerships. Say that Audi A6 is popular at your dealership, so you keep stocking it. But the mid-sized vehicle people are searching for is a Lexus ES 350. With access to that market data, you will know you should consider adding that Lexus to attract new customers who might not have visited your dealership before. Until you sell more of them, you will not be able to accurately predict those critical perfor¬mance indicators, but it’s a great reference point and consideration.
3) Regional transaction data
When you look at market data and see that the Lexus ES 350 is the “it” mid-sized sedan, what you cannot tell is whether it is popular in your geographic region. That is where regional transaction data helps; this resource gives you the inside track on which vehicles are selling at dealerships in your region. The Audi in your store, the Lexus next door, an Infiniti down the street … you’ll get detailed data about the purchasing behaviors of your in-market buyers, so you can make more educated decisions about your inventory to, again, attract new customers with a more diverse inventory. On the flip side, knowing which vehicles are popular in your region might create undue competition for hot cars, driving up your costs and turn times while driving down purchase prices and margins.
4) Comprehensive Inventory Management Solutions
Maybe your Used Car Inventory Manager has access to your DMS and the two third-party data resources we mentioned. That’s great. You’re arming your manager with really great information she or he can blend and, based on experience, make more informed inventory stocking decisions.
But the next generation of Used Car inventory management is here; it’s a comprehensive inventory management solution that combines all of the data resources into a single mobile application that blends that data on your behalf—all from your smartphone, tablet or PC. The solution then makes recommendations about whether or not to stock specific vehicles, based on potential margins, average turn times, and volume.
A comprehensive inventory management solution helps you answer the proverbial question: To buy, or not to buy?