Want To Grow Your Used Car Business?,,,,,,,, Just Where Do You Start?

As a business owner making the decision to enter the used car market place more aggressively and to then make the investments in your business and in the people required, in order to ensure success, this can seem to be a daunting process. It is an entirely different process from that required to plan for continued success in the new car market, it is going to require a continual and structured evolution as you grow, but for those prepared to dedicate the time and the energy in this area of their business, the rewards are startling.

Currently the size of the annualised used car market place is over three times the size of the new car market and what’s more, you are free to take as large a slice of this market as you want. There are no restrictions within this market on the volume of stock you can purchase and then retail, no prescribed model mix equations and no limit on profit margins; it really is the business with no restrictions and unlimited profit potential.

Now by default all franchised dealers will already have the foundations of a used car business in place; they will sell ex-demonstrator cars, ex-service loan cars and part exchanges, but is this taking advantage of the opportunity that the used car market presents?

If we use a rudimentary argument at inception, the immediate size of the used car market to your business should be just over 3 times the size of your new car business; if this is the national picture, then why should your town or city be any different? To put that into sharp focus, if you are selling 500 new cars a year, then statistics show that the immediate used car opportunity is 1,500 units per annum.

So how do you get there and then continue to grow thereafter? Remember the age of the internet and advances in technology have transformed the purchasing behaviour of customers and the size of your used car market is no longer linked to the size of your local conurbation.

Well this journey will take a continual focus and investment in the correct resources at the right time in your growth journey. It will require a continual focus on all the areas required to succeed in the used car market place and this will evolve year on year; the infrastructure required to get you to 500 used car sales per annum, will bear no resemblance to that required to get you to 1,000 and more after that. But at the foundations of this growth will be an operational structure that will need to be built and then continually evolved and this process will involve many challenges, but will include;

• The building of the used car stock acquisition programme required to succeed; if you want to sell 1,000 used cars per annum, you will probably need to purchase at least 1,200.
• The eventual splitting of your sales team and the building of the independent used car sales department required to achieve the volume objections.
• The implementation of the operational procedures required to ensure that your used car business can succeed.
• Enhancements in stock turn to reduce funding and the costs associated with the used car operation.
• The implementation of the management and sales enquiry procedures required to operate at the volumes desired.
• The building of your used car senior management team; finding the right people.
• Effective individual targeting and budgeting for the used car operation, that allow for the cyclical demands of the market place and that stand-alone from the new car requirements of the overall business.
• An understanding of the importance of, (and the ability to offer), the suite of financial purchasing arrangements required to be successful in the used car market place.
• Constructing the marketing and advertising campaigns, as well as the strategies associated with success in the used car market place.

If you are the owner of your own business or a member of a senior management team, this process may seem daunting but luckily help is at hand.

The owners of Autoformance have owned and run successful used car operations and been at the forefront of the development of approved used car programmes for a host of manufacturers.

We have been on this journey ourselves, understand the challenges involved because we have faced and overcome them in our careers, so know exactly what will be required and when, in terms of operational procedures, funding and personnel.

If this post has resonated with you and you would like to know more about our used car business development programmes then please do not hesitate to contact either Andrew Banning or Malcolm Thomas at ajb@autoformance.com or mgt@autoformance.com 

Alternatively please do not hesitate to call us on 0345 057 3177, when it will be our pleasure to help.

For more information about our services please visit our website at www.autoformance.com

Andrew Banning.
Director.