WHY A THOROUGH FACILITIES APPROACH CAN PAY DIVIDENDS FOR YOUR USED-CAR BUSINESS
One area that’s becoming increasingly important for franchised dealers concerns pre-owned vehicles. From a facilities perspective there are many approaches and variables that can help integrate a successful pre-owned vehicle operation into your physical environment.
In our experience, there are several, simple aspects you can incorporate to keep your customers focused on the purchase, rather than finding their own way around your facility and lot.
As with all Certified Pre-Owned Vehicles, there must be an extensive technical check completed on the OEM’s form. If there’s no capacity to do these checks, it is obvious that your pre-owned operation will be limited. Also consider that only a finely detailed vehicle will command top dollars in the marketplace, and that the average preparation time per vehicle is likely to be over three hours.
We’ve seen a few different approaches to tackle the capacity issue. The simplest is to add shifts in the evenings or weekends if not already in place.
In larger markets, or at larger volume pre-owned dealerships, we see separate locations in industrial areas. This seems to be effective when considering the high cost per square foot of operating in a prime retail area or auto mall. The “behind the curtain” location is a great way to increase capacity, utilize more apprentices, sell more parts (internally), and add additional capacity for tire season!
The most effective outdoor display does not need to have an abundance of signs, flags or banners. The key is to have all the vehicles in a designated area, with some sort of identifier on the windshield and rear window or licence plate.
It also helps to have slightly oversized parking spaces for pre-owned vehicles. Not only does it help to identify the area, it also allows customers to fully walk around the vehicle and view it properly. This extra space also allows for doors to be opened without dinging the vehicles on either side. After all, you only want to recondition the vehicle once. It’s also very important to have access to power outlets. Pre-owned sales 101 — the car has to start the first time.
INTERIOR DISPLAY AND LIGHTING
In many cases, an interior displayed pre-owned vehicle is a great conversation starter with the entry-level buyer. While we think it is effective to place the pre-owned vehicle anywhere in the showroom, we think that a designated spot with different lighting levels from your new vehicles is the best approach.
The chances of having a pre-owned vehicle with the same paint quality as a new one is almost non-existent. A lighting level that is slightly lower will help de-emphasize any flaws or swirls that may have a negative impact on the value of the vehicle. The intent is not to be misleading however. Competing with a brand new factory paint job is a difficult task for demo vehicles, let alone a pre-owned one, so it’s best that such vehicles are displayed differently, and with the proper labelling to easily identify them as pre-owned vehicles. Accessing a power plug is a must have. Maintaining a battery on a new vehicle is important — even more so for one that’s pre-owned.
If you have dedicated pre-owned personnel, we think a facility should allow them to have a direct view of the lot. We recommend that when planning a new facility, there should be easy visual connections to the pre-owned area and the location where the sales consultants are seated. While this is not always possible, we’ve also seen that camera systems and even pre-owned offices on second floors overlooking the lot can be effective.
Workstations in the showroom are not always permitted by OEMs. Even if they allow it, directly sitting in windows is not a good practice in our opinion. Not only do the workstations block the showroom (why pay for full glass?), workstations and wiring tends to get messy in these areas. Also, the sun can be an uncomfortable issue at certain times of the day, necessitating blinds. Which, once again, defies the logic of having full glass to highlight vehicles in the showroom.
Chances are, you already have a security system and cameras in place. Why not use this technology to keep your staff aware of who is on the lot in a subtle way that also gives them an appropriate and comfortable workstation area?
To summarize, your facility has a significant impact on your pre-owned operation.
It dictates the number of vehicles you can acquire, how you display them, how you project the image of your dealership to the public and how you accommodate those people that will consult and service your customers.
We hope some of these simple tips can help organize the thinking of your pre-owned managers, keep your team accountable, and most importantly help you prosper and profit from this ever-growing segment of the industry.
Monte Weis, President of Weis & Associates, shares his design and facility expertise with dealers, via the leading industry journal, Canadian auto dealer magazine. A selection of articles are reposted here with permission.