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Long story short I was allowing people to display cars for sale on my lot as a courtesy and occasionally I would sell one of my own that I had owned for years (so they were a loss no matter what), the combination of cars displayed put me solidly in "Retail Dealer" territory so I became one at the suggestion of my DMV guy. So now that I'm a legitimate car dealer with dealer plates, insurance, paperwork, and auction access I'm not having too good luck making money off that segment of my business. I could use some help in this department otherwise I'm going to cease selling cars after my licence expires. Here's the problems I'm encountering:

 

1. Cars at the auction sell for more than I anticipated and cost me at least 1 day of work.

2. Craigslist buying takes up infinite time on the weekend.

3. All the cars have some kind of hidden problem.

4. Customers want to get a perfect 4 year old lease car with 40,000 miles for $5,000, and ironically

5. Customers want a 200k mile $500 car with no problems

6. Reconditioning used cars to a safe and reliable condition without any used car sleaziness removes all the profit plus some of my own money if I want to sell it the way I would want to put my wife and kids in it.

7. "Green light", "Front-line ready", and "Just Serviced" are all lies at the auction.

8. Selling a vehicle and actually getting the money takes way longer and is much more difficult than I anticipated.

.

I know there's a learning curve I just need some help with it. Here are a few questions:

 

What cars sell the best on your lot? (miles, price, condition, age?)

What is a reasonable time frame to sell a vehicle?

What is a reasonable net profit to make on a vehicle?

How long do you wait before wholesaling a dud or taking a loss?

How do you determine the price of a car you are buying and expect to sell it for?

How many cars a month do you need to sell to remain profitable?

How do you advertise a constantly changing inventory like cars on the lot?

 

I'm in NY so all cars must be inspected. Thanks for the help. At the rate I'm going I might as well go to the casino, I might have better results. The only benefit so far is it keeps the mechanics busy during down time and I get lucky occasionally with a car that needs very little and sells quickly. Luck is not a viable business plan.

 

Note: the irony is I can't let people sell their beaters on my lot anymore because I have to "consign" them as a dealer. ugh.

 

I have been using Manheims MMR as a buying guide and KBB clean retail as a selling guide.

Edited by alfredauto

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  • Have you checked out Joe's Latest Blog?

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      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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