COMMENTARY: Known cars sell better than unknown cars

It’s a timely reminder: Once again personal trades have outperformed external purchases by almost 3 to 1 at franchise locations, according to NADA used vehicle sales reporting. In fact, 70% of all used vehicles sold were traded in. This has been the case for decades.

Why? It’s simple: public perception. At the end of the day, no amount of sophisticated marketing will outperform the power of public perception.

And what does the public think? They think a personally owned vehicle is more desirable.

If a person is going to put their family in a vehicle, it needs to be in good shape. The same holds true when trusting a vehicle for a road trip covering thousands of miles on vacation, or even for relying on it just to get to and from work every day. Public perception also says a brand-factory-trained certified mechanic knows how to work on that brand of vehicle the best.

As a dealer, when you can provide proof of this kind of history, you’ll be able to market the vehicle for optimal sales performance. These vehicles can sell faster, for more money. Additional history details such as personally leased and homegrown (sold and serviced at the same location) create an even more compelling story. Homegrown vehicles can only be found in your service department. Dealers need to get the owners to trade them in, or mine their service department for these vehicles.

The most successful dealers have instituted a robust new car sale-to-service-to-sales action plan. They’ve been able to create a short-term fix by service mining, and a long-term solution by creating a “used car factory” leveraging both their new-car sales and their service department. As these customers enter the normal trade-in cycle the vehicles they are trading back in are homegrown

Dealers can create the highest value target by putting these vehicles through the manufacturer’s Certified Pre-Owned inspection process and reconditioning. The additional warranty and roadside assistance that come with a CPO program create a high-value proposition that’ll appeal to today’s more conservative buyers.

Put it all together, and dealers can speed up sales while also pocketing more from each Homegrown vehicle they discover, clean up and pitch to already loyal customers.

Robert Grill is Vice President of Strategic Client Services at Carfax