I had coffee a couple of weeks ago with Jim Guise, who used to be a regional sales manager for Auto Mart Diablo Dealer. Jim has helped us better understand and support the needs of the used car market. Jim did a great job explaining some of the inner works of user car dealerships. “Turn” and Making Money According to Jim, a used car dealer’s profits really lies in their turn. “Turn” is a term used in the industry to represent the amount of time a used car sits on the lot. In general, if a user car dealer is able to turn a used car in 10 to 20 days – they make money, if they turn a used car in 20 to 30 days - they break even, and if it takes 60 to 90 days to turn a car – they loose money.
Acquiring Used Cars Used car dealers usually acquire their cars one of four ways:

• On a trade, when a customer trades in an old car towards the purchase of a newer one
• From a user car wholesaler, who purchase excess inventory from banks and other dealers
• At an auction, where dealers pay to have the car in the auction, and dealers pay to buy used cars
• From a private party, usually through classifieds

Marketing Used Cars Once a used car dealer acquires a car, they will spend on average about $300 in marketing cost to the car off the lot. “Low Gross” dealers will try and make at least $500 of profit on each car. “Middle gross” dealers look to make $1,200–$1,500 per car. “High gross” dealers, who look to make $3,500–$4,500 in gross margin per car, are rare in today’s economy. Used Cars and the Real Estate Market The down turn in the real estate market has actually hurt the use car market in recent months. Most affected are used car dealers in previously hot real estate markets like California and Florida. For example, San Francisco bay area BMW dealers who might have sold 1,000 cars in a 3 month period last year, are off the mark by as much as 70% in the same 3 month period this year! In the past, many home owners would refinance their home and use the proceeds to buy a new or used car – those days are gone for now!

So How Can vFlyer Help?
So how does vFlyer help a used car dealers become more successful in the increasingly competitive marketplace?

• Making your Product Look Good According to Jim, “You have got to make your product look and seem better”. Jim correctly notes that potential car buyers no longer “pack up the wife and kids” and cruise down to the local auto dealer”. Instead they start their search online! The Internet has become their ‘virtual lot’ and buyer are armed with more than just the MSRP! Auto dealers have the option of having their classified ads look ordinary or extraordinary – that’s where vFlyer can help!
• Bigger is Better Jim made an interesting point that in order to capture more of the consumer’s time and attention, bigger is better! Bigger photos, more photos, more information and more options! At vFlyer we allow you to include more photos in your gallery! You can customize flyers to add more information or options. Use the premium layout to make your ads really stand out! Use enhanced HTML templates for Craigslist that feature large photos on Craigslist and more!
• Market Cars on the Internet In the past, the biggest bulk of a used car dealers ad budget went into newspaper. With the advent of the Internet, this has all changed. A medium-sized dealer these days has a monthly marketing budget of $35K-$45k and as much as 25% to 35% is being spend on Internet. Cost-effective vFlyer allow you to significantly improve online distribution without the high cost associated with other marketing options. With vFlyer, you can get your entire inventory online the same day. Unlike TV and radio, the Internet is a point of sales (POS) vehicle that can work in conjunction with brand advertising to increase customer acquisition.