Car sales and the X-factor

Selling used cars seems like a simple process; you buy for one price and sell for a higher one. OK that may be over simplifying a not too complicated business, but if car sellers stick to some basics of preparation, presentation and price (the three P’s) they can usually be sure to turn a profit most of the time. With the knowledge many car buyers can now acquire at the click of a mouse, the process of buying and selling cars has become more scientific and involves many different factors. For example if we examine the journey of a used car from the dealer first buying it until the customer drives it off the forecourt then there are many factors and people involved in a successful outcome. When a car becomes available on the trade market, which could be through auction, underwrite from rental or leasing company, manufacturer stock or part exchange, to name but a few, the process to profitably selling that car begins and not everything that goes on in that journey is necessarily measurable and the repeating of which doesn’t necessarily mean the same outcome every time. Without getting in too deep we have to ask the question why a customer would choose one car over another. Well in the old days before the net buyers would have to do the research on the run to a certain extent and make their comparisons by visiting the sites which contained cars they were potentially interested in. These days those comparisons can be done on line and the choice can be narrowed based on each different customer’s buying criteria. To say that similar examples are compared only on price may be true in some cases but that is too simplistic to cover all bases, some dealers will tell you that if a car is advertised too cheap buyers will be turned off thinking there is a catch, when very often it may just be a car they have had in stock for too long and therefore financially the company decide the car has to go and will be reduced in price until that happens. On the other hand if there are a selection of cars of similar age and mileage, and one or two are advertised well over the market price, they will not gain any enquiries due to the price being too high. Finding the optimum price usually depends on the market with some notable exceptions. For car dealers to really get ahead of the competition and to appeal to as many potential car buyers as possible the three P’s always need to be adhered to but at the same time their must be the personnel available to successfully deal with the ensuing enquiries. Gaining an advantage over the competition to ensure that the cars advertised are desirable is about much more than price. It is about culture, professionalism, reputation, experience, customer centricity and desire with enthusiasm as well as having the right volume and balance of cars for sale. Potentially, from when a car is bought wholesale or trade to when it is picked up by its new owner there could be as many as a dozen or more people involved in the outcome and playing a role in how profitable or not that outcome is. Increasingly the successful dealers are looking at all the aspects which go into that process and dissecting them regularly to ensure the enquiries are constant and can be converted into appointments and ultimately sales. So when one dealer has one grainy picture, or worse no image at all of car he is trying to sell, compared to one which has 9 different high quality images of inside and outside of the car whether the former is much cheaper or not the perception of the potential buyer is such that 9 times out of ten they will follow up on the latter model. Although this will not always result in a successful sale because, as we have pointed out, there are many other factors to be resolved which cannot always be measured there will certainly be a much greater possibility of success. As we say in the trade if you don’t buy a ticket you can’t win the prize!

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3 Responses to Car sales and the X-factor

  1. Mark Robbins September 27, 2010 at 9:09 am #

    All of the above is true, however, the internet has also allowed “time wasters” to proliferate on an unprecedented level, we have said this before but just lately it has become epidemic (in our area anyway) even with good practice, good cars, and not to mention dedicated and excellent commited staff we have just had our worst ever month. I hate to say this but we have gone from selling between twenty to thirty cars a month to wait for it……… Two this month!! and yes, i did say Two, the month has been an absolute disaster and as i write this early on Monday morning my staff are awaiting the “crisis” meeting they know is coming. I was away this weekend celebrating my wife’s 50th birthday but our top sales person felt compelled to phone me late on saturday afternoon to tell me the bad news, with over fifteen people through the showroom doors on the day not one had purchased and many were rude, picking holes beyond all resonable fairness, (one chap found a touched in stone chip on a lower valance of a five year old Ford and declared his time wasted and would we pay his petrol!!) and many just aimlessly walking around with no real intention of buying but still driving many many miles “for a run out” as one lady said. This has been the line of customers all month and out of maybe 50 to 60 followed up internet enquires we have managed to sell just two cars? maybe it’s been our turn to have a crisis, maybe we have been unlucky in the extreme, or just maybe the expectations of internet customers and their attitudes need to be addressed? let’s hope for my employee’s sake this change’s soon, very soon!

  2. bertie big bag September 27, 2010 at 8:58 pm #

    hold tight mark i think its just a blip,i have heard of many traders saying the same its feast or famine out there and i think its your turn.if you employ good commited staff and have a good reputation you will ovrcome this ‘blip’ interesting your point about internet timewasters though i thought the whole idea of the net was to do all your timewasting before you came down to see us!!! be lucky

  3. Mark Robbins September 28, 2010 at 7:55 pm #

    Thank’s Bertie, maybe it is just a blip, but my team feel there is something more serious underlying this other than just timewasters. Almost 60% of the enquire’s we are getting are for finance, now of course times are hard but Finance is still available out there i hear you saying, trouble is at the lower end of the used market say in the £3,000 to £4,000 mark ( and worse if lower ) there are no players willing to lend at reasonable interest rates, and worse still if a customer wants to borrow a mere couple of grand or less they are penalised on the amount deemed to be too low to make it worth their while, that or the car is deemed too old at the end of the finance term, without a doubt we counted 21 people this month who were refused finance on those terms, we do not offer sub prime finance nor do we wish too but we have started to offer much more price sensitive stock as the higher ticket vehicles, say in the post £5,000 mark are really sticking, and at the £8,000 to £12,000 mark we are shifting nothing! BMW, Mercedes, Jaguar etc, all in best colours, best specs, right history and priced to sell…………..well, as you can imagine there not !! One senior figure at a well known finance company said this to me today, “this part of the south east has seen some of the highest rates of borrowing on car finance in the country, a number of us have had our fingers well and truly burnt with non payers over the last couple of years, we are being very very cautious” all very well i suppose, but one thing’s for sure, something has to give, in 30 years of motor dealing i have to say this has been the hardest couple of years i have ever seen particually for the independent sector, thank god i dont owe the bank anything, we would have gone under by now!

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