When your used car inventory needs to be re-stocked, there are only so many places you can turn for quick, cost-efficient cars. Whether your dealership’s turnover is greater than projected or you’re having a hard time closing trade-ins, you need a reliable source of pre-owned inventory to meet your goals. If you’ve ever been in this situation, you’ve probably relied on a wholesale auction to fill in those empty spaces on your lot.
Conventional wisdom among dealers is that auction cars put you at a disadvantage. They’re more expensive than trades because the wholesaler marks them up, and that means you have a much slimmer profit margin to start with. Depending on your relationship with your local auction, you might have more luck than other stores, but sometimes you just have to take what you can get.
Here’s the rub, though: you probably aren’t getting as much out of auction cars as you could be. The right tools can turn vehicles purchased through auction into an immediate advantage for your store, as long as you’re buying the right cars from the right auction at the right price.
Consult Real-Time Data to Bid on the Right Cars
If you’ve been in this business for any length of time – and plenty of us have – you might think you know which cars your dealership is lacking. You have a feel for the gaps on your pre-owned lot, and you trust yourself to find cars that will make a difference in your bottom line.
Today’s market is more varied than ever, with more cars available for consumers to choose from. The internet has opened up car-buying in a way that every customer can find the car they want. If you’re still trusting your instinct on auctioned used cars, you could be missing out. It’s the equivalent of showing up for an exam that you haven’t studied for.
Instead, you should be using acquisition tools that combine market data with your dealership’s historical data to find cars that will be the best fit for your store and your customers. The right software platform can help you determine not only what make and model to go after, but also which trim, color, options, and more.
It makes sense to stock up on cars you know you and your sales team can move, so find a platform that will help you find the best opportunities at auction.
Software to Connect with Wholesalers Throughout Your Region
It can be good to have an existing relationship with your local wholesale auction. Even if you think you have an understanding, you need to accept that you aren’t the only dealership buying. Your competitors bid at the same auction as you do, which is why you should consider expanding your search.
If you want the best shot at the cars you need, find a software solution that lets you search for cars directly rather than basing your efforts on what a local wholesaler can provide. You might have to look elsewhere in your region to find auction cars that will give you an advantage, but it’s still worth it to have them shipped to your store if you know you can profit.
Tools to Continue Making Smart Cost-to-Market Investments
Once you know which cars to buy and you know where you can find them, you need to decide how much you’re willing to pay. With a wider range of options, you can limit your bidding on each auction car based on the total cost to you (accounting for shipping and reconditioning) and still build an inventory that will maximize your profit margin.
To make this happen, you’ll need a software suite that includes pricing and appraisal tools. These tools are also helpful for managing your whole inventory and streamlining your pricing strategy.
Make the Most of Auction Cars with the Help of MAXDigital
We’ve talked about three solutions, and we’re happy to say that MAXDigital champions all three in one platform. MAX has access to the largest source of real-time market data in the auto industry, and we’re proud to deliver that capability to your dealership.
Our software can not only help you capitalize on the hidden value of auction cars, but it will also allow you to improve every step of your sales process. The tools included in the MAXDigital Inventory Management Platform help you appraise a greater number of cars and set prices based on market value and your dealership’s internal goals. Our services are designed to help you protect your profit margin and adapt to all the ways the internet has changed our industry.