Currently the Used Car Industry is experiencing a severe shortage of used cars. We at the Used Car Voice have been warning and writing about the used car shortage for several years. This shortage of vehicles has squeezed margins nationwide. For a used car manager to be successful in today’s market they seriously need to evaluate their sourcing capabilities.

Every used car professional has their own set of strengths and weaknesses. Some are great closers. Some are great negotiators. Some are great at purchasing. Some are great managers. Some are reconditioning experts and some (very few) are great at all of these roles. But, today’s used car environment almost requires a used car professional to be excellent at sourcing if they want to succeed in today’s marketplace.
Fortunately there are several things that a Used Car Manager can do to improve their used vehicle sourcing success.

• Have a Plan
• Increase Your Network
• Focus on Reconditioning Time and Effort

Have a Plan
Having a purchasing plan has never been more important. Before any used car buyer attends their weekly auctions they should know exactly how many vehicles they need to purchase and exactly which vehicles need to be bought. This requires analyzing your current inventory as well as the numerous auctions run lists. Vehicles are too difficult to source to waste your time at an auction that isn’t going to have the type of inventory you need to maximize your dealership’s sales.

Increase Your Network
Gone are the days when a used car manager could provide all their dealership’s needed inventory by simply attending the local auction once a week. Not only are used car managers attending more auctions, they are also traveling farther to attend their auctions. It is increasingly important to source vehicles in different regions and locations.

Given the recent shortage of used cars, many used car managers have changed their philosophy toward wholesalers. Shrewd managers are leaning on their current wholesale relationships as well as actively trying to expand their network. Dealing with wholesalers can have some negative consequences, but having access to their networks will help alleviate the pressures of this used car shortage.

Reconditioning
The used car shortage is forcing all used car professionals to purchase vehicles that may not be up to their previous quality standards. Across the nation we have seen a decrease in quality at the initial purchase. However, this does not mean that dealerships are putting out subpar used vehicles. It merely means that dealerships need to spend more money on reconditioning to produce the same quality vehicle that their previous standards demanded. In other words, buyers can’t wait for the absolute cream puff any longer. They are being forced to purchase a used vehicle that is slightly more edgy.

Because more repair work is being done, dealerships are seeing a significant increase in their “work in process” time. This further reduces a dealership’s front-line inventory. To counter act this effect, many dealerships have increased their sales professional’s knowledge of vehicles that are being repaired. In other words, many used car professionals only sold the vehicles that were available on the front lot, now they are selling every vehicle on the lot.

There aren’t many resources available to assist used car managers in improving their sourcing abilities. Used Cars 101 is an excellent resource and available at the Used Car Voice. However, I encourage all used car managers to focus on their sourcing capabilities to curb the negative effects of our industry’s used car shortage.