Automobile Dealer Magazine

Tim Deese's Used Vehicle Department Tips

by Tim Deese

(excerpted from Tim's 1996 NADA Convention Workshop) Used car advertising has totally changed since we have become engrossed with the #1 sales force in America. Individuals sell the majority of used cars.

The main thing you've got to remember about used car advertising is this: 50% of all used vehicle traffic is from visual drive-bys. So how important is merchandising, cosmetic and mechanical appearance and rotating that front line?

The other 50% of used vehicle traffic consists of referrals, repeat customers and advertising. So advertising accounts for a fraction of 50% of our traffic, but if we're going to advertise used cars, we've got to learn how to do it effectively. Now, if 50% is from visual, then 50% of our effort in advertising should be in merchandising. That's why we teach a little process called The 14 Day Demo Evaluation. In 14 days, we want the used car manager to check on demos on that car. Now, here's a `93 Grand Am on the front line---low mileage, non-smoker, the car's ready to go. But it's been here 14 days and it only has two demos on it. What do we know? Nice car, but with only two demos, it ain't right for that location, is it? Because it has had no street demand even though its had two rotations to the front. It may be the cherriest, low mileage car we've traded for in months---but two demos in two weeks? Our salesmen are walking around it. What do we have to do? That's right- dump it.

The next question you have to ask yourself in used car advertising is this: What drives a used car buyer?

Try this: Go pull 90 days' of F&I contracts, add all the payments together and divide it by the number of contracts and what does that give us, gang? A payment range that we sell in. Now, if we take our current used car inventory and we balance it against the payment range we sell in, $10-$20 either way, what have we just learned? This ain't brain surgery.

Now for the advertising part of advertising. Eighty-five percent of people polled look first in the classified sections of newspapers for a used car. With 50% of our traffic from drive-bys and 85% having first looked in the classifieds, we already know something that the individual doesn't (the payment range we sell in)---can't we start putting this thing back together and start working smart? We've got to get back to the basics.

Tim Deese is President of Progressive Basics Inc., the nation's only exclusive used vehicle management training company.