How to generate a quality used car stock for dealerships?

That used vehicles are an essential business for any dealership is a reality.

Let's just look at the data: GANVAM states that this June, used vehicle sales are already 6% higher than before the pandemic. On the other hand, the percentage of customers considering buying a used vehicle in Spain was 65% in 2019, and up to 72% in 2021. This means that only the remaining 28% of customers do not consider used vehicles as an alternative, according to a study conducted by TÜV SÜD.

For dealerships, these figures translate into around 15% to 20% of total revenue. Furthermore, it should be noted that the profit margin on used vehicles compared to new vehicles is usually between 300 and 600 euros more per unit sold.

In other words, used vehicles have become a fundamental part of any automotive business owner's operations.

The three formulas for generating quality used vehicle stock

The factors are diverse, especially in a post-pandemic 2021, in which we have seen used vehicle sales break historical records for two reasons:

• Price: the most sensitive factor for the vast majority of a dealership's customers, and even more so given the current economic situation.
• Current consumer culture: "ownership" is losing ground to "pay-per-use" or less committed usage than that offered by new cars.

In other words, if used vehicles are becoming an increasingly common alternative among buyers, and margins are also more generous, the question you are probably already asking yourself is: How can I generate my own quality used vehicle stock?

The alternatives for generating quality used vehicle stock in a controlled way, and preferably organically, in 2021 are three:

1. Direct purchase of used cars from the brand

There is little mystery in the most common way to get quality used vehicles for your point of sale, as the vehicles provided by the brand are usually highly qualified for the used vehicle market. Either because they don't have too many kilometres or because they have received a very high-quality overhaul.

2. Importing second-hand vehicles

Another well-known option, but less common due to its complexity, is importing.

These vehicles are interesting for building good used vehicle stock, either because the vehicle range can be higher, as is usually the case with cars imported from Germany, or because the margin they generate is higher, as can be the case with vehicles coming from the Polish or Nordic markets.

However, don't lose sight of the fact that car importation has a complex process behind it. Generally, you will have to invest time, money in transport, taxes and registrations, and the uncertainty generated at the beginning of not having a supplier you can trust.

3. Generating your own Rent-A-Car

Without a doubt, the most profitable way to create quality used vehicle stock. This model allows the dealership to get a first margin from the car's billing during the rental period and a second margin when the car is sold.

It is the most organic way to generate quality used vehicle stock, as the vehicle will have access to the best maintenance (in terms of quality and price), which is the one provided by the dealership's own workshop. It also offers the customer a second-hand vehicle that may be the one they have driven for several months, and which they already trust.

On the other hand, you decide which cars and with what equipment you make available to your rental customer. This not only allows you to differentiate yourself from rental companies that offer a more commoditised range of cars, but also gives your fleet a higher residual value.

This third option is possible because, nowadays, installing devices to keep your fleet controlled, all its billing, mileage, opening and closing cars with an App and much more is very fast and very economical.

And it is this option that allows a dealership to develop quality used vehicle stock, avoiding immobilisation costs, and developing a new service/business to offer to its entire customer portfolio.

Who is already doing it?

The examples are many. The Bequikly technology is enabling everyone, from the smallest dealerships to the largest groups or associations, to offer their customers a more flexible and more economical service. That is, what our customers are asking us for.

For example, La Flecha Motor and Agromotor, or the dealerships collaborating with town councils throughout Spain for the rural carsharing of VIVe by Hyundai are already billing mobility while generating their own used vehicle stock.