In my last blog post, “Another Year of Auctions, Another Year of Opportunities,” I addressed a common sentiment in 2018: “I can’t buy profitable cars; prices are through the roof! I think I am just going to sit out for now and get back into the swing of things after the first of the year.” Well, 2019 is here — so let’s get started!
Let’s assume that this time last year, you left opportunity on the table. Ever found yourself saying, “I wish I had more cars in stock for those tax-time buyers that emerge in the coming months”? You know, the consumers that are sure to get a tax refund and do the math using their last paycheck of the year. Spoiler alert, they have those now! Perhaps they didn’t quite qualify for a car loan before. But now they have cash, and “cash is king.” Plus, according to TransUnion, 16.5% of all auto transactions forecasted for 2019 will be subprime. That’s up from only 14.6% in 2017. Got your attention now?
Here’s how to beat the competition to the ideal tax-time cars at auction. I’m going to lean into what I know. My best months in retail came from pirating ideas from others. So, I called one of our Stockwave Performance Consultants. That’s a former buyer who works one-on-one with Stockwave dealers to help them find cars that make money. What other software at the Stockwave price point comes with an experienced consultant? If you have Stockwave and aren’t using your Performance Consultant on a regular basis, you’re missing out!
He gets me online and we share a screen. He pulls up a business plan in Stockwave that he calls “back of book.” It’s set up like mine, with all the expenses accounted for: transportation fees, auction fees and a sliding scale based on the CR score for reconditioning. He also filters out some unrealistic luxury segments, vehicles with high mileage or too-old model years, and cars with damage issues — all the items that a lender would not appreciate. His plan compares buying the car at wholesale for 100% MMR to the NADA Clean Trade-In value. That’s the spread that matters most for those tax-time buyers trying to qualify for a loan, and to a dealer’s opportunity to make gross. He proceeds to show me that this morning there are over 350 units retail-able under $20K that have a “buy it now” status AND can be purchased well behind NADA Clean Trade-In. That’s it. He might as well have dropped the mic (or headset). Session over, time to buy some cars!
This is just one of the many tricks that technology like Stockwave, paired with a Performance Consultant, uses to find you that window of opportunity to capitalize on a market condition. By saving you countless hours trying to find those cars at auction, Stockwave helps you beat the market to the right inventory. Stop by our booth at NADA and let us show you more.
Happy New Year!