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When your business model is built on buying and selling cars at auction, the faster they sell, the more money you make. So, you need to do everything possible to make sure these cars sell quickly and become profit – not cost – centers. Let’s take a closer look at the most overlooked and one of the most important keys to a quicker sales cycle for cars at an auction: proactive car maintenance.
The U.S. car industry has experienced a seismic shift since the pandemic started, with fewer new cars in production and on dealer lots due to a shortage of microchips and labor challenges. And we all know what this means: an increased demand for used cars, which impacts available auction inventory.
Cars sold at auction has decreased 13% over the past year. The reason? Dealerships are holding on to, or selling, their used cars rather than moving them to auction. This makes it even more important for you to take whatever actions you can to shorten and improve your sales cycles.
The shorter your sales cycle, the greater your revenue potential. A shorter sales cycle:
- Improves your cashflow (you earn money faster)
- Increases single-vehicle turnover (more efficient space management)
- Allows you to capitalize on opportunities (trends/value-deals/etc.)
There are several ways to shorten your auction sales cycle, but an essential one is to provide proactive maintenance to the vehicles on your lot.
Here are four ways you can leverage car maintenance to shorten your sales cycle.
1. Clean and detail each car
Anyone who’s had a roommate knows that we all have different definitions of cleanliness. But selling your cars at an auction is the last place that you’ll want to cut cleaning corners. After all, no purchaser of a used car wants to clean the car after they buy it. More than likely, they simply won’t want to buy a dirty car.
In addition to covering the basics like vacuuming and wiping down the inside (or a full interior detail if warranted), removing any debris or trash, and deep cleaning the outside of the car, consider also cleaning the engine and hosing down the tires. Taking these extra steps can help to reassure a potential buyer that the car has been cared for and is a worthy investment.
2. Repair what you (profitably) can
In most cases, your multi-point intake will reveal at least a few items that need attention. This could include things related to the lights, tires, brakes, filters, fuses, etc. Often, you’ll find a few issues that can be addressed proactively.
If these issues don’t require a large investment, consider fixing them. Actions like installing new passenger headlight, adding fresh floor mats, or putting on a new tire may require a modest investment, but they go a long way toward securing a higher return and a faster sale. That said, the cost of the repairs should always be weighed against the potential profit from selling the car.
3. Conduct regular inspections
The longer a vehicle sits on your auction lot, the more likely it is to experience issues like dead batteries or flat tires. To keep your assets sale-ready, conduct scheduled routine inspections of your vehicles. These don’t have to be as in-depth as your intake session but should be thorough enough to catch any critical issues early on before they become bigger problems down the road (pun intended).
It’s important for these inspections, assessments, and any repairs to be part of the complete vehicle history. Fortunately, Cox 2M’s LotVision software makes it easy to share the status and complete history of the vehicle during the staging sessions. This will show potential buyers that the car has been well cared for, giving them peace of mind in their purchase.
4. Be honest about the car’s problems
Most dealers and retail customers buying cars at auction understand the vehicles aren’t perfect. If they were, they’d already be on a dealership’s lot or on the road. What people don’t want is to be sold a lemon.
The takeaway is to be proactive about sharing any known issues. If there is a major problem with the car that you feel is too expensive to repair, communicate it. This will allow the buyer to assess the vehicle fairly and realistically, and you’ll earn their trust. And the sale.
Smarter Inventory Management
Cox 2M’s LotVision software gives car auction companies the ability to increase visibility in their inventory by keeping track of exactly where a car is in the lot and the status of the car. This includes real-time onboard diagnostic readings and battery levels.
Want to learn more about LotVision? Schedule a demo and see how LotVision can help you reduce your sales cycle.