Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:
- Bordering On Chaos
- Used Vehicle Operations Getting Technical. Lets Talk Software
- June 2018 Used Vehicle Retention Index
Software really is at the heart of most of the business operations at today’s dealership. I’m not discounting the importance of good people, great thinking and hard work, but the fact remains that technology is integral in the selling of vehicles today. Software is deployed to manage marketing of new and used, accounting, sales, inventory, HR, and I could continue down the long list of specific tactical elements where software helps dealers do business.
The focus here will be on used vehicle operations and what I see as constituting best practices for the used business unit to concentrate on. As you know, there is much to consider.
Off the top, it is critical for used car managers to understand which vehicles to purchase, pricing trends in the market and how much they should be paying for those vehicles. The right vehicle valuation software is crucial to help provide this knowledge.
When selecting your valuation tool, it is important to know what type of data is provided. For instance, auction reporting data provides insights on what used vehicles sold for at auction versus data sourced from retail listing prices from vehicles posted online. Dealerships should hone in on tools that provide more comprehensive value and trend data that includes auction results, industry sales data and upstream OEM sales from across Canada.
Okay, now that we (hypothetically) have that knowledge in place, how and where are the best tech methods to source those vehicles? Using the power of the internet to leverage online auctions and participating in simulcasts work best. They help increase reach by covering a larger geographic distance, as opposed to attending actual auctions themselves. On top of that, transporting vehicles is relatively inexpensive. This can all be done at a desk in the dealership. In doing so you may identify regional opportunities to find specific pricing on specific types of vehicles. The best case scenario would be to couple this technique with your newly installed valuation tool to help recognize the best vehicles to purchase.
It’s also wise to pay close attention to vehicle appraisal tools employed in your used car department. You want your appraisal tool to allow you to review the vehicle at auction or during the trade-in process. The best versions of this software capture vital details about the vehicle’s current condition. The most sophisticated will offer photo capture options, to record vehicle condition regarding its general state, any damage and to document features or equipment.
Now that you’ve sourced the right vehicles and purchased them, they begin to add up on the lot. Deploying an inventory management system can help organize, monitor, and drive efficiencies.
Inventory management software goes further than your standard DMS which track the likes of your floor plans and interest costs. Although a basic feature, tracking vehicle time on lot and turn times is vital reporting data for your operation. Further to that, most systems will identify the units on the lot that sell fastest, helping you with some marketing and sales decisions.
Good inventory tools will generate templated used vehicle listings that can be syndicated to your website as well as the major listings websites, like Canadianblackbook.com. Needless to say, this is a major time saver and can bring consistency to the marketing plan.
All of the above are considerations when tooling your used vehicle team with software, however, the most important piece of deploying (any form of) software or technology is the process or workflow. Quite frankly, it can be a culture shock. Determining the composition of a dealership’s workflow is the most important task when trying to optimize this system. If your software solution does not fit or you have to adopt a new workflow to fit the system, then the full feature set and ROI, will certainly not be realized.
The key is training. I’m not talking about training that shows you to ‘click here and…do that’. No, proper team training that puts the focus not just on the clicks but ties that back to YOUR process. Training ensures that all team members understand the functionality and how it can help them day-to-day.
After all, the growth of software within any dealership equates to a cultural shift that’s not always easy. It’s a cultural shift that we need to embrace, but only if the solutions chosen actually fix existing problems or inefficiencies. The right software in you used car operation can do both.