Automotive News - October 17, 2016 - Supplement - S43

OCTOBER 17, 2016 ❙ 43 A X E L R O D B U I C K - G M C , PA R M A , O H I O No auctions for this used-car chief Manager's staffers go on the hunt instead, and get paid Late-model General Motors used vehicles tapped for certification undergo inspection and are reconditioned cosmetically and mechanically to meet factory standards. Older, high-mileage vehicles that will be sold "as is" are mechanically inspected and must meet the dealership's safety standards. "Safety is No. 1," he said. "We've been here since 1974. We've got a pretty big reputation to uphold." When Yates used to go to auctions to buy used vehicles, it was an all-day affair that required homework the night before. He would pore over lists of vehicles for sale and gather price and vehicle history report data on about 50. Then he would drive about two and a half hours to the auction. After seeing and touching the vehicles, Yates would cross half off his list before the auction started. He would "get close" to buying about 10 and would actually purchase two or three vehicles. Buying vehicles online kept him at the dealership but required the same amount of research - and he would not get to see the vehicles before purchase. Then there were the problems of variances in vehicle condition reports and transportation costs. Printed in Automotive News July 25, 2016 Arlena Sawyers asawyers@crain.com ayme Yates doesn't do auctions to find used-vehicle inventory. The pre-owned sales manager at Axelrod Buick-GMC in Parma, Ohio, believes the money and time he previously devoted to finding and buying quality used vehicles at an Ⅲ Paying sales staffers auction is better spent mobito find used lizing and incentivizing his vehicles sales staff to find the vehicles he wants. Every vehicle requested and purchased by Yates earns the staffer who found it $200 on the spot - no waiting for payday. Staffers pocket $100 when they buy a vehicle from a customer who came to the dealership as result of a third-party lead paid for by the dealership. "It gives them a little bit more incentive to do it, to have an extra $100 or $200 in your pocket by the time you sign the customer up," said Yates. "They are my army. They go out and they find it." J 5 years Those staff-found vehicles, along with trade-ins and vehicles he buys on third-party classified sites and from other local dealerships, provide the dealership with about 80 to 100 used vehicles that he turns every month, Yates said. Yates has not purchased a vehicle at an auction - physical or online - in five years. "It's not that I don't like the auction," he said. "I don't think it's the most effective way to acquire vehicles. "Generally speaking, you're bidding against several other people, and some of those people will get paid no matter how much they pay for the car." About half of the used vehicles that Yates stocks are taken as trade-ins. Another 10 to 15 percent are acquired through an informal network of local dealers who buy and sell used vehicles among themselves. Technology Jayme Yates lets his staff know via email which vehicles he needs to fill specific gaps. He depends on his staff for the rest. Yates lets his staff know via email which vehicles he needs to fill specific product gaps during the week or during the month. Staffers are free to search sources such as Cars.com, AutoTrader.com, Craigslist, eBay or anywhere else to find specific vehicles. 'Safety is No. 1' The dealership also shops for vehicles among the leads funneled to it by some of those same third-party sites. Yates pays his staff to find vehicles because, he said, "If your sales staff is going to be acquiring vehicles, they obviously are going to be taking themselves off the sales floor." Still, trade-ins are the single largest source of used-vehicle inventory, Yates said. He will retail just about any vehicle, but his core vehicles are 4 to 8 years old with 40,000 to 75,000 miles on their odometers. While he shuns old-school methods of acquiring vehicles, Yates depends on technology to help him fill the dealership's inventory. For example, he uses an app from Cars.com that enables him to make tentative offers on vehicles on his smartphone at any time or place. It enables him to buy vehicles without paying auction fees and transportation costs. Also in his arsenal is a used-vehicle inventory management tool from vAuto Inc., of Cox Automotive, that provides him with data about which used vehicles to buy and at what price to reach his profit goals. Over the last few months, a new Cox Automotive product, Stockwave, that determines which used cars a dealership needs and searches for them at auctions nationwide, has caught Yates' attention. He said the tool doesn't solve his issues with condition reports and transportation costs, but he is intrigued with it, nonetheless. "It's a lot more efficient than the old way. It narrows down the research for you," he said. "It's something we're looking into." c http://www.Cars.com http://www.Cars.com http://www.AutoTrader.com http://www.AutoTrader.com

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