Archive for the ‘Used Cars’ Category

We’ve made you a list, so check it twice to boost used-car sales (Part 5 of 5)

062915 IL We’ve made you a list, so check it twice to boost your used-car sales (Part 5 of 5)

We know you read the first four parts of our series.

Or went to CarStory to get your own copy of the white paper on which it is based.

But just in case you didn’t, we’ll share a checklist from How to Convert Used Car Shoppers to Buyers that hits the high points of the series (for details, you still will have to go back and read parts 1-4).

The checklist is divided into four parts – pricing, value, attention and merchandising.

RELATED: The first commandment for turning used-car shoppers into buyers (Part 1), The most important three-letter word when selling used cars (Part 2), And now the most important number when selling used cars (Part 3), Calls to action: When Words matter most for your sales funnel (Part 4)

Here’s the checklist from the CarStory white paper and where you can find details in our series:

Pricing

  • Understand where each vehicle falls in the market and make sure you’re highlighting the points consumers value most (Part 1).
  • Always end prices with a 99 or 999 (Part 3).

Value

  • Never miss an opportunity to highlight “must have” features (Part 2).
  • Always include seller comments and remember to highlight reconditioning details (white paper).
  • Provide consumers as much of the information they need, otherwise they will leave your site or your lot and find it somewhere else (Part 2).

Attention

  • Always include the right images, but only nine to 10 at most for your marketplace partners. You should absolutely include all images directly on your website (Part 3).
  • Update your calls to action to include a strong verb-plus-direct-object construction (Part 4).
  • Don’t overwhelm the user with too many CTAs – focus on the ones that will move buyers through the process (Part 4).

Merchandising

  • Focus your merchandising efforts on the [top five] areas that matter most to consumers (Part 1):
  • Vehicle condition
  • Accident history
  • Service history
  • Listing price
  • Value

“Dealers can do a lot to improve the way they communicate to consumers with better information, pricing and merchandising,” says CarStory. “By doing so you will help consumers move through the sales process more efficiently, help your inventory stand apart and, ultimately, drive more sales.”

This checklist and our series should help you get and stay on track.

And now the most important number when selling used cars (Part 3 of 5)

062215 IL And now the most important number when selling used cars (Part 3 of 5)_1

Consider nine your lucky number.

So suggests a white paper on results of a customer survey by CarStory, a company that provides independent reports about vehicles and features in specific markets.

“From our survey, we learned that most people who buy a used vehicle do so to save money, or at least to get more bang for their buck while minimizing depreciation,” says CarStory in its recent report. “Based on this, we looked at ways that dealers could price vehicles to improve consumer interest.”

RELATED: The first commandment for turning used-car shoppers into buyers (Part 1 of 5) and The most important three-letter word when selling used cars (Part 2 of 5)

And what pricing insight did the survey provide? That the number “9” is better than “0.” Seriously.

“We looked at ways that dealers could price vehicles to improve consumer interest,” says CarStory in its report, How to Convert Used Car Shoppers to Buyers. “We started with an obvious question: What effect does ending a price in 9 have on consumer interest and conversion? This, of course, is the oldest trick in the book and one that is detailed in the journal of Quantitative Marketing and Economics.”

“We found that dealers that end their prices in 99 convert shoppers from the search results pages to vehicle detail pages much more often,” reports CarStory. “Prices that end in 99 versus 00 showed a 16 percent lift in SRP-to-VDP conversion. Prices that end in 999 performed nine percent better than those ending in 000. … Take away: Always end your price with multiple 9s.”

But, apparently, the number nine isn’t just important in use-vehicle pricing, according to CarStory. It also comes into play in the number of photos dealerships should use to maximize impact on shoppers.

Classic “hero” shot of used truck for sale.

Classic “hero” shot of used truck for sale.

“The first best practice when it comes to images: represent the car accurately … [because] misrepresenting the car online will just lead to disappointment and frustration in person,” says CarStory. “Second best practice: Use fewer images [on non-dealer websites] that show the vehicle highlights, including the hero shot, dashboard, seating configurations and key features.”

And by fewer images, CarStory apparently means nine. Not 10. Not 20. Certainly not 30. Just 9.

“Using fewer photos may seem counterintuitive, but we looked at lead submission rates on vehicles based on the number of images the posting contained,” said the CarStory report. “We found that nine images offered optimal lead submission potential. Postings with nine images saw a 50 percent higher lead submission rate than those without any images, 56 percent higher lead submission rate than those with 20 images [and] 71 percent higher lead submission rate than those with 30 images.”

“It appears that consumers are suffering from image fatigue,” said CarStory. “We see some listings with 40 images. When you share so many images it forces the consumer to navigate the picture carousel to find the ones that best tell the vehicle’s story.”

Now, what’s your lucky number?

Next: Calls to action: When words matter most for your sales funnel

Make the most of your used-car sales with Santander Auto Finance

It’s no secret that franchised automobile dealers sell about seven used cars for every 10 new cars on average.

And that used cars have been more profitable for those franchised dealers since 2005, long before The Great Recession, based on data from the National Automobile Dealers Association.

What may not be as obvious – but still very important to your dealership’s continuing success – is that Santander Auto Finance can help you maximize your used-car sales.

052215 IL Make the most of your used car sales with Santander Auto Finance

Because we provide funding to hundreds of thousands of nonprime and subprime borrowers – representing significant portion of our multibillion-dollar business – Santander has the experience and proven technology to help you make more deals (and make more on your deals), especially with potential buyers who might be turned down by other lenders.

RELATED: What you need to know to work with Santander Consumer USA

Santander Auto Finance makes it easier to provide your customer a wide selection for their next car, funding deals for quality pre-owned vehicles up to nine years old and with up to 120,000 miles. And approvals happen within 30 minutes, funding within 48-72 hours in most instances.

SAF also has no look-to-book requirement, so a dealer can submit all funding applications for consideration without having to maintain a closure percentage.

Dealers who work with Santander can see the difference compared to other lenders, often speaking in terms of relationships, partnerships and, the bottom line, profits.

“We have been able to capture deals that were undeliverable in the past,” said one of many dealers who have spoken about their productive relationships with Santander.

“As long as your customer is able to provide a down payment or trade-in and meet minimum requirements, you will be able to put them on the road,” the dealer said. “It gives you a chance to assist people that you were unable to help before – the high-risk customer that you would turn away you can keep in your dealership to increase your profits.”

Here’s what the finance director of another dealership had to say about working with us:

“Santander has been a great financing partner of our dealership for quite some time now. We would not be able to sell as many cars as we do without their unique brand of auto finance. While other lenders give you turndowns, Santander always gives you a way to go.”

In other words, Santander Auto Finance is a not-so-secret ingredient in your formula for success.

AutoTrader study: CPO vehicles gaining shoppers’ interest, trust

Auto TraderCertified pre-owned vehicles – used cars, trucks and SUVs that have passed through rigorous inspections – are attracting more buyers than ever, and those buyers are more likely to remain loyal to the same brand when they make their next purchases.

Those are two findings of AutoTrader.com’s fourth annual CPO study which seeks to provide insights into consumer awareness and consideration of CPO to the automotive industry.

The findings are especially important now because of a wave of CPO-eligible vehicles AutoTrader and other industry experts expect to hit the market going into 2015.

“Over the next few years, more than nine million certifiable vehicles will be hitting the market, making now the time for consumers, manufacturers and dealers to pay close attention to the CPO landscape,” said Rick Wainschel, vice president of customer insights at AutoTrader.com.

“The insights from this study clearly show that consumers are more open than ever to CPO vehicles, and, if dealers and manufacturers can turn shoppers into owners, they are well-positioned to build long-lasting relationships with those consumers.”

Among the key findings of the study:

Familiarity with and consideration of CPO are rising, comprising three-quarters of new-car shoppers and 45 percent of used-car shoppers. Last year, 44 percent of new-car shoppers and 30 percent of used-car shoppers considered purchasing a CPO vehicle for the first time. Those figures are up from 22 percent and 18 percent, respectively in 2013, at least partly due to the economy the study concluded.

Educating prospective buyers that recent or newer model CPO vehicles have passed a detailed inspection provided by the manufacturer and typically come with a warranty boosted consideration by new-car buyers to 84 percent from 59 percent, and used-car buyers to 69 percent from 50 percent.

“Most shoppers still believe that vehicle certification comes from the dealership,” AutoTrader reported. “However, their consideration increases when exposing them to a comprehensive definition of CPO.”

Most shoppers are willing to pay a premium for CPO vehicles over non-certified counterparts. Among new-car shoppers, 84 percent are willing to pay more, which is up 22 percentage points since 2013, while 83 percent of CPO shoppers were willing to pay more, up from 66 percent the previous year, and 51 percent of used-car shoppers are willing to pay a premium compared to 34 percent.

“However, the amount of premium has decreased since 2013, with the biggest decrease seen among new-car shoppers,” according to AutoTrader. “In 2014, new-car shoppers said they were willing to pay a premium of $2,032, down significantly from $2,940 in 2013.”

CPO can be the gateway to new-vehicle sales, with 49 percent of satisfied owners overall likely to buy a new vehicle from the same brand, including 56 percent of men.

Look here for more details on the study, which included 450 interviews, split evenly among new, used and CPO shoppers planning to purchase a vehicle in the following six months. AutoTrader also surveyed 1,195 current CPO owners to understand their experience better.

AutoTrader is an online marketplace for new, used and CPO vehicles from dealers and private sellers.

 

Getting started with Chrysler Capital and CCAP Certified vehicles at auctions

Chrysler CapitalThe future has arrived sooner than expected.

Chrysler products have begun funneling through the auction lanes around the country, bringing with them the Chrysler Capital name and a new name in vehicle certification – Chrysler Capital Certified.

You already should see announcement banners and vehicle stickers introducing both to auction buyers at many of the same places Santander reconditioned vehicles currently are sold.

And you even may have bid on a Chrysler product offered at the auction by Chrysler Capital.

For those to whom this still is new, Chrysler Capital is the private-label, full-service lending program managed by Santander Consumer USA Inc. (SCUSA) and Chrysler Group LLC that finances purchases and leases of Chrysler products – Chrysler, Jeep, Dodge, Ram, Fiat and SRT – under a 10-year agreement.

Planning for the Chrysler Capital remarketing program, which got underway more than a year ago at SCUSA and Chrysler Capital, has been led by Steve Solomon, vice president of asset remarketing for both organizations and a former regional sales manager at Chrysler.

But don’t be confused by the SCUSA-Chrysler Capital connection. Chrysler Capital remarketing and the certification program stand on their own, focused on preparing and selling Chrysler products at auction.

Creating a separate program represents a big change for us at Santander, but one that we embrace.

And yet, Chrysler Capital Certified brings to the auction the same high standards of quality, price, value, selection, performance, service and satisfaction to which customers of Santander have become accustomed through the Santander 7 vehicle certification program.

“It’s the new wave in reconditioned vehicles with the same exacting standards you’ve come to expect from Santander,” promises our advertisement in Greenlight Remarketing magazine.

It’s a promise that we take seriously at both Chrysler Capital and Santander. So look for Chrysler Capital and Chrysler Capital Certified vehicles, and we’ll look for you at the auction.

– Brent Huisman, SVP, Asset Remarketing

Finding the sweet spot in used car sales

used carIf you’re looking for the sweet spot in which vehicles will work for your used sales department, it could be the vehicles that are up to 5 years old – designated certified pre-owned.

Sales of vehicles ages 1 to 5 were especially “hot” in April, rising 9 percent over 2013, according to CNW market research and reported by AutoRemarketing.com. Overall used vehicle sales rose just 3.65 percent.

Meanwhile, nearly 200,000 certified pre-owned vehicles were sold during the month, a 9.5 percent jump over the numbers from a year ago.

Coincidence? Probably not, suggests Joel Overby, editor of AutoRemarketing.

Which automakers saw the most movement among certified pre-owned vehicles?

  • Asian automakers, with 91,027 vehicles sold
  • The Big Three, which sold 68,253 certified vehicles
  • European automakers, with 33,811 sold

And even with the second place finish in total used sales, U.S manufacturers saw an increase of 13.5 percent from the previous year. Otherwise, European automakers gained 12.1 percent and Asian carmakers 5.8 percent.

For the first four months of the year, the total number of certified units sold reached nearly 750,000, an increase of 10.5 percent over last year – and that’s just for franchised dealers. If you throw in independent dealers and private party sales, the April numbers jump to nearly 4 million units sold.

CNW research analyst Art Spinella attributes this to the power of the Internet.

“The Internet continues to drive traffic to used car sellers,” Spinella explains. “In April, the number of shoppers who went to a dealership because of something seen on the Internet jumped 116 percent versus a year ago.”

No matter what the reason is, certified pre-owned vehicles between one and five years old seem to be the secret weapon of increased auto sales. So if you’re looking for the new inventory for the used vehicle department, you may want to look at some later model units because it appears that the secret is out.

– LaQuenda Jackson

 

Have we reached peak age for vehicles on America's roads?

used carsWhat were your customers doing early in 2003?

If they are the proverbial average Americans, then they were buying a car. That’s right, the average car on the road is an astounding 11.4 years old, according to R.L. Polk & Co.

And that raises the question for dealers and remarketers: Has peak age been reached for cars on the road, or should drivers expect to share the road with ever-older vehicles?

The answer to that question depends on who you ask.

“I think the age of cars on the road is peaking,” said Tom Kontos, executive vice president, ADESA analytical services. He sees a surge in new car sales as the greatest force lowering average age.

“People tend to be unaware or forget that the average age of vehicles is driven significantly by new vehicle sales,” he said. “As those sales have recovered, and as they have resumed their normal pattern of exceeding vehicle scrappage, [the] average age will fall – even with vehicles lasting longer.”

Ricky Beggs, editorial director of Black Book, feels that we are over the hump in terms of vehicle age. The average age climbed significantly when hard times kept buyers out of the new car market in 2010 and annual sales plummeted to 10.3 million, Beggs said.

“We reached out to a significant number of franchised dealers in the second half of 2012 and asked them, ‘What was the average age of the trade-ins back in prerecession years?’” Beggs said. “The majority said it was a 3- to 4-year-old car. We then asked them what it was in 2011 and 2012 and the answer was most of the trades were 8 to 11 years old.”

The inquiry was repeated at the end of 2013.

“This time the answer was they were getting some 3- to 4-year-old trades and also still getting some 8- to 11-year-old vehicles,” Beggs said. “This is a sign more people are getting back into the more traditional trade cycles, while those who stayed out of the new car market are now coming back.”

The current growth of leases, which almost disappeared between 2009 and 2011, according to Beggs, also will help reduce the average age of cars out there.
Still, Eric Lyman, managing editor of ALG’s Residual Value Guidebook, sees a different future than Kontos and Beggs and believes that peak age has not yet arrived.

Lyman sees two major factors leading to this: First, vehicle quality is very high and improving steadily, and second, the number of miles being driven by U.S. drivers is declining.

“Millenials aren’t really into cars,” Lyman said. “Road trips are a thing of the past. Urban living is on the rise. Fuel costs are up. All these mean less miles being driven.”
These shifts are here to stay, and we’d do well to get adjusted sooner rather than later, Lyman said. “Better quality cars plus less miles being driven equals longer life of our vehicles.”

In any case, we’re at least several more years before we know the answer to our question.

– Philip Ryan, Royal Media

 

GreenLight Remarketing | Trade-ins, risky business and more

After starving for inventory during the Great Recession, automobile dealers have turned to trade-ins as a reliable profit center, reports Karen Jones in the current edition of GreenLight Remarketing magazine. As new car sales continue their climb back toward pre-recession levels, trade-ins are com­ing back in higher numbers with greater value, Jones writes in her article, “Trading Up.” Jones’ story and others appear in our GreenLight Remarketing video here.

 

Welcome to GreenLight Remarketing TV, brought to you quarterly by the authoritative magazine about innovative automotive remarketing:

TRADE-INS
After being starved for inventory during the recession, dealers have turned to trade-ins as a profit center. “Dealers love trade-ins,” Ricky Beggs told Greenlight Remarketing. As car sales continue to climb back to pre-recession levels, trade-ins are arriving at dealerships in higher numbers with greater value. Beggs predicts 15.3 million new sales including 9.1 million trade-ins for 2013.

MANHEIM SIMULCAST ON MOBILE
Manheim auto auction house has introduced Simulcast on Mobile to its smartphone app. Dealers can now bid on cars in the auction lanes from anywhere they are. Simulcast purchases account for 16 percent of Manheim’s business, and mobile is expected to account for a huge part of that percentage – and contribute to further growth – as 1 in 3 customers already access Manheim on a mobile device.

RISKY BUSINESS
Will the increase in used vehicles arriving at dealerships drive down prices? Analysts are watching the increased supply of used vehicles with caution, and identified some of the risks to watch for. One segment that is top of mind for analysts is luxury vehicles. Still, many experts see little risk in the expected volume increase and anticipate a strong 2013 for remarketers.

CPO BOOM
The Certified Pre-Owned market is continuing its winning streak from 2012 into 2013, showing no signs of slowing, according to analysts. CPO vehicles are attractive to buyers for the financing arrangements, maintenance programs, and 150-point inspections. CPO vehicles also bridge the gap between new cars and pre-owned  vehicles, providing buyers with another option when looking for their next vehicle.

You can read about all these stories and more in Greenlight Remarketing, a publication from Santander Consumer USA Inc.

Rare Dodge Challenger is available

Awesome and rare Dodge Challenger up for auction.Call it a rare find. Call it a newly discovered treasure. Call it an American icon. No matter what you call it, there’s no denying the fact that this 1970 Dodge Challenger T/A Coupe is special AND it’s available. That’s right, this marvel of machinery will be up for a Santander-sponsored auction next month, in Lane 6 at the Manheim Northstar Minnesota auction. This prestigious vehicle packs a 340 Six Pak engine 4-speed Hurst built exclusively by Chrysler for this model and only for 1970.

The car is a light green metallic color, and according to Mike Bruce, AVP of External Sales for Santander it “is the classic model that Dodge modeled the new Challenger after when they relaunched.”

The numbers are matching and to make it even better, it is one of only 2,399 that have ever been produced. This car is an absolute “barn find” and has not been registered since 1989.

“This thing is rare,” says Bruce. “In my 25 years in the business, this is the coolest car I’ve ever come across.” Bruce also commented on the possibility of finding a set of wheels such as this saying, “These kinds of vehicles don’t come around often. The fact that so few were made makes this car even more special.”

Santander is proud to put this historic car on the auction block and hopes that people appreciate seeing something so prestigious and unique. In today’s car market, you just don’t seem to find a vehicle like this that possibly jump started the trend on the modern-day sports car. Don’t pass up the opportunity to get your hands on a part of American automotive history when this 1970 Dodge Challenger T/A Coupe goes up for auction next month.

'Sandy' an ill wind for used-car market

Hurricane Sandy might not be done wreaking havoc on the U.S.

Next up: The used-car market, expected to suffer from the storm months after the fact.

Analysts expect tens of thousands of cars to be scrapped because of storm damage, mainly flooding, saying the result is likely to be higher prices at used automobile lots nationally.

Making matters worse, an estimated 16,000 new cars were destroyed in the New York area – but that figure doesn’t include losses by the “two biggest automakers by U.S. sales, General Motors Co. and Ford Motor Co.,” which haven’t given estimates yet on the number of their vehicles that were total losses.

“The storm destroyed about 250,000 used vehicles on the East Coast, and maybe more, according to estimates by the National Automobile Dealers Association,” wrote Jerry Hirsch of the Los Angeles Times in a report distributed online Nov. 8 by the Detroit Free Press. “That puts pressure on what already is a tight supply of good-condition, late-model used cars and could push prices for such vehicles up by 0.5 percent to 1.5 percent in December, said Jonathan Banks, an analyst with NADA.”

“That amounts to a little more than $50 to $175 for the average used vehicle,” according to the Times, but “auto information company Edmunds.com projects a higher estimate, saying that used car prices will climb $700 to $1,000 ‘in the short term.’” The impact on supply would spread across the country because “we have seen a trend for dealers, regardless of where they are located, buying inventory online, and that means that geography is not as important.”

If there is good news in all of this for the auto industry, the storm and flooding losses eventually could lead to an increase in new car sales, automakers and dealers said, according to a Nov. 8 report from New York’s Daily News online.

Santander Consumer USA is providing assistance and waiving certain fees for customers affected by Hurricane Sandy. Visit our website here for more details.

By: Mark Macesich