In both US and Europe, the used-to-new vehicle ratio has increased since 2003 from 2.4 to 2.6, showing a steady growth of used vehicle sales by volume. In addition, used vehicle sales in the U.S. are today more than twice as profitable for dealers as new vehicle sales (roughly 2.7% profit margin, compared with 1.2%). Moreover, the used vehicle financing and insurance segment is often the most profitable operational unit of a retail dealership, posting 11.3% profitability in the US market.
The used-car buyers are very different from new-car buyers, they spend about 40 per cent more time researching online during the buying process compared to new-car buyers, This difference is usually because customers assume any new car of a given model is largely the same in quality and reliability and has strong brand backing. On the other hand, used-car shoppers assume each vehicle has unique wear-and-tear characteristics and often does not enjoy the same level of brand guarantee. Hence, it is time for all the used-car dealers to up their games to satisfy the digitally savvy used-car consumers.
Below are some powerful used-vehicle management features for maximizing used car profit and customer experience:
1. Transparent, Easy and Digitized Customer Experience.
Automotive/Equipment Retailers can find ways to use the digital-oriented used-car buyer’s desire for advanced technology to their advantage in the used vehicle sales process. For example, Power platforms are demanding more innovative features to improve customer experience such as:
• Booking digital test drives by registering an available used vehicle from the nearest retail outlet
• The guided accessory selection process to enable easy access to vehicle specifications
• Simple and easy to use the online vehicle configurator to customize the available Used vehicle
• AI-enabled virtual chat-bot to provide 24×7 support for all customer queries on Used vehicle
2. Smart Vehicle Evaluations with Advanced Digital Tools
As per various sources, most profitable used vehicles are mostly 4- 5 years old cars and trucks. It is always very difficult for the dealers to find the inventory of a lightly used vehicle. Digital tools such as Microsoft power platform can simplify the selling experience by connecting the sellers with the dealers.
The potentially used vehicle seller provides their vehicle make, model, year and submits an online evaluation request using power apps. Then, this data is received by the dealer and analysed within the Annata DMS system. Finally, the dealer schedules an onsite inspection to confirm the exact market value of the vehicle. The inspection team at on floor go completely paperless with Annata ’s powerful Mobile Inspection App:
• Take pictures of the vehicle before the inspection
• Runs different inspection checklists to validate body conditions, looking for scratches, dents, and rusts
• Take pictures of the cosmetic flaws and dents
• Complete the inspection checklists for suspensions, lights, lenses, tires doors etc.
• Even the unusual engine noises can be recorded in the inspection application
• Generates an evaluation/Inspection report to the customer
• And finally, receive customers digital signature upon completion
As mentioned above, after the completion of the inspection the technician submits a complete inspection report stating the current condition of the car. The owner of the vehicle can also choose to repair some of the faults discovered during the inspection, this is the win-win situation for both the Customer and Dealer. The dealer will benefit from the additional service revenue, on the other side, the repairs will help the customer to sell the vehicle for the higher price.
3. A Faster, Simpler & Accurate Trade-In Process
Based on the data from national automobile dealers’ association about 65 % of dealers used car inventory on average comes from trade-ins on a new/used vehicle. So, the used vehicle business is largely relying on the trade-in process.
When the customer trade in his used car, the market value of the old vehicle is deducted from the new car price. Annata makes the trade-in process faster and simpler by seamlessly integrating the trade-in options within the sales journey as shown below:
The trade-in options are seamlessly integrated with the sales modules and enable dealers to easily initiate the trades-ins without having to navigate multiple screens.
The capability to create trade-in lines with used-vehicle details and define the market value based on evaluations /Inspections.
All vital statics such as trade-in margins, the vehicle specification and trade-in accessory details are accurately captured and accessed from one place.
Easily manage and initiate the trade-in purchases.
And lastly, the ownership transfer process using the “Issue of the deed” option.
All changes in ownership and history of vehicle owners/co-owners/Operators etc are captured accurately within the vehicle data.
4. 360-Degree Real-Time View of Used Vehicle Fleet
It is very important for the used-vehicle dealer to have all the information to source a right car to the right customer based on his requirements. Fleet management module of Annata help dealers to gain a real-time view of the used vehicle fleet. All the data specific to a used vehicle will now be available for them in one place.
• Mileage& Usage history information
• Inspection Faults
• Service history
• Accessories and components list
• Inventory availability
• Fuel card
• Vehicle lifecycle (Multiple vehicles lives with insights of cost and revenue during different lifecycle)
• Maintenance schedule information
• Vehicle recall information
• Warranty information
• Vehicle specifications (such as Brand, class, model, serial number, registration number, manufacturing year, VIN number)
• Vehicle purchase information
• Vehicle documents
5. Simplified Used-Vehicle Financing Process
The finance department is another way for dealerships to score by offering finance packages and other services (such as extended warranty, service contracts & insurance). This is often considered the most profitable operational unit of a retail dealership with almost 11.3% profitability (in the US market). On the other hand, offering inhouse or 3rd party finance packages provide customers with an easy option to purchase a car from the dealership.
Annata offers some interesting features to manage used-vehicle loans, calculate interest rates and create collections as below:
- Annata enables dealers to offer their customers a variety of finance packages.
The solution seamlessly integrates the finance packages with the sales modules and enables dealers to calculate accurate monthly payments and interests based on the pre-defined interest rate.
The capability to invoice and track all the customer payments on a periodic basis with a dedicated finance contract.
Find out more!
If you would like to find out more about Annata 365, contact us at email@example.com