Digital Dealer - December 2019 - 34

M A R K E T ING & ADVERT ISING: Use d Car s

By Jim Boldebook
Founder,
CBC Automotive Marketing

The Power of Used
Car Marketing
This is the fourth article
I've written in two years
on the importance of
franchised dealers expanding used car marketing
efforts to not just survive but
thrive in the coming decade.
Having been in the retail
automotive field for most of
my life, my greatest joy has
been the ability to help
dealers achieve their
greatest possible success.
When I started CBC Automotive Marketing in 1983,
many dealer clients were
selling Ford Escorts for
$99 a month on 48-month
contracts. The MSRP of
those vehicles was roughly
25 percent of the median
income. You'd be crazy to
buy a used car with those
metrics...right? Here was a
car that got almost 30 miles
to a gallon, had front wheel
drive, and was really a pretty solid little vehicle. Today,
a similar little econo box will
set you back thirty grand,
close to 60 percent of the
median income and to get a
payment that works without
a trade or big down, you
need an 84-month contract!
Consider the reality
in the numbers. In 1975,
the median income was
$12,686. A new vehicle was
$3,800 -- roughly 30 percent
of annual income. Today,
even an econo box is more
than 50 percent of the annu34

DECEMEBER 2019

al median income and most
people don't want an econo
box! The more desirable
CUV lookalikes (hard to tell
a Jaguar from a Kia) are
well over 60 percent of the
median income. The hard
truth is, that unless you can
finance folks for the next
ten years, 70 percent of
America is struggling with
new vehicle prices.
The need for greater
balance in franchised dealer
used car marketing continues to grow. For a while, the
OEMs were only supporting
CPO sales. Now, more
manufacturers are recognizing the need for a new/used
vehicle balance to keep
those franchised dealers
profitable.
In a recent interview,
Erin Kerrigan, founder of the
sell-side Kerrigan Advisors,
talked about a survey of
650 franchised dealers. In
that survey 86 percent of respondents said they project
the value of their business
to either climb or remain
steady. The conclusions
were that those dealers who
remain highly optimistic felt
the high margins of used
vehicle sales, F&I, and
service and parts were the
keys to continued growth,
profitability, and brand equity.
More and more successful dealerships are employ-

D I G I TA L D E A L E R . C O M

ing cutting edge tactics such
as sell-from-home, where a
person can get an offer on a
used vehicle with just a few
clicks, and the dealership
will visit the owner, write
a check, and pick up the
vehicle.
The used vehicle
marketing space is getting
big spend from national
operators like Vroom and
Carvana hawking home delivery and satisfaction guarantees. Some of the biggest
automotive public groups
are opening up stand alone
used vehicle operations.
If you are not solidly in
the used vehicle business
in the next few years, you
are committing yourself to
commodity sales of new
vehicles for not much more
than the doc fee. It's starting
to look like the gas station
business back in 1960
where the owners of Esso
and Sunoco and Texaco
were selling gas for 1 cent
a gallon to bring customers into the service bays
and wash racks. American
franchised and independent
dealers will sell 70 million
cars next year. Around 16
million will be new; The rest
used. Simple math would
tell you that if you're not
selling at least one to one,
you're missing out.
What will your strategy
be for increasing used vehi-

cle sales? What percentage
of your budget will you devote
to the marketing effort? One
of the greatest challenges
to most franchise dealers is
the coop addiction that has
dominated and controlled
advertising efforts on all tiers.
The factory is not going to
help you (other than CPO)
with this effort.
Most importantly, who is
running the Used Vehicle
Sales Ship? If you don't
have a strong used vehicle
manager this should be your
most important hiring goal in
the next few months.
A really good inventory
management system is also
key. From the majority of
those I've talked to, vAuto
is one of the best. There
are also new ways to put
idle inventory into the 'black'
column with programs offered
by companies like Hyrecar,
which rents to Uber and Lyft
rideshare drivers.
For more suggestions for
implementing a strategy and
tactics to increase your used
car business, I encourage
you to dvisit DigitalDealer.
com/Magazine to view my
past articles on used car marketing, which include these:
„ Advertise Used...Sell
New, October 2018 issue
„ More Success Secrets,
December 2018 issue
JIM BOLDEBOOK is founder
of CBC Automotive Marketing, an advertising/marketing
agency working with some of
America's most successful
dealerships. He has been in
the broadcasting, advertising
and marketing fields for almost
50 years. EMAIL:
jim@cbcads.com


http://www.DIGITALDEALER.COM

Digital Dealer - December 2019

Table of Contents for the Digital Edition of Digital Dealer - December 2019

Digital Dealer - December 2019
Online Extras
Four Keys to Build a Better YOU
9 Areas That Build Value in Your Dealership
From Speculating to Selling: Overcoming Sales Challenges with Technology
For Sustainable Profit – Build a Purchasing Department
Meet the Marketing Mastermind Speaking at Digital Dealer Orlando
Get a Jump on Making It a Great New Year
Job Management Makes or Breaks Your Bank
Interview with Derek DeBoer of TC Chevy
Elevate Your Year-End Sales Event with Immersive Instagram & Facebook Stories
It’s Time to Move Beyond the Chaotic Dealer Website Experience
The Power of Used Car Marketing
9 Benefits of Doing a Year-End Social Media Audit
Auto Brands and Dealers Need to Move Toward a ‘Tierless’ Marketing
A Case for an Efficient 2020 Dealership Advertising Budget
4 Critical Components of Effective Sales Training
Five Tips to Improve the Sales to Service Handoff
Seasons of Opportunities
Digital Dealer - December 2019 - Digital Dealer - December 2019
Digital Dealer - December 2019 - Cover2
Digital Dealer - December 2019 - 1
Digital Dealer - December 2019 - Online Extras
Digital Dealer - December 2019 - 3
Digital Dealer - December 2019 - Four Keys to Build a Better YOU
Digital Dealer - December 2019 - 5
Digital Dealer - December 2019 - 9 Areas That Build Value in Your Dealership
Digital Dealer - December 2019 - 7
Digital Dealer - December 2019 - 8
Digital Dealer - December 2019 - 9
Digital Dealer - December 2019 - From Speculating to Selling: Overcoming Sales Challenges with Technology
Digital Dealer - December 2019 - 11
Digital Dealer - December 2019 - For Sustainable Profit – Build a Purchasing Department
Digital Dealer - December 2019 - 13
Digital Dealer - December 2019 - Meet the Marketing Mastermind Speaking at Digital Dealer Orlando
Digital Dealer - December 2019 - 15
Digital Dealer - December 2019 - Get a Jump on Making It a Great New Year
Digital Dealer - December 2019 - 17
Digital Dealer - December 2019 - Job Management Makes or Breaks Your Bank
Digital Dealer - December 2019 - 19
Digital Dealer - December 2019 - Interview with Derek DeBoer of TC Chevy
Digital Dealer - December 2019 - 21
Digital Dealer - December 2019 - 22
Digital Dealer - December 2019 - 23
Digital Dealer - December 2019 - 24
Digital Dealer - December 2019 - 25
Digital Dealer - December 2019 - 26
Digital Dealer - December 2019 - 27
Digital Dealer - December 2019 - Elevate Your Year-End Sales Event with Immersive Instagram & Facebook Stories
Digital Dealer - December 2019 - 29
Digital Dealer - December 2019 - It’s Time to Move Beyond the Chaotic Dealer Website Experience
Digital Dealer - December 2019 - 31
Digital Dealer - December 2019 - 32
Digital Dealer - December 2019 - 33
Digital Dealer - December 2019 - The Power of Used Car Marketing
Digital Dealer - December 2019 - 35
Digital Dealer - December 2019 - 9 Benefits of Doing a Year-End Social Media Audit
Digital Dealer - December 2019 - 37
Digital Dealer - December 2019 - Auto Brands and Dealers Need to Move Toward a ‘Tierless’ Marketing
Digital Dealer - December 2019 - 39
Digital Dealer - December 2019 - 40
Digital Dealer - December 2019 - 41
Digital Dealer - December 2019 - A Case for an Efficient 2020 Dealership Advertising Budget
Digital Dealer - December 2019 - 4 Critical Components of Effective Sales Training
Digital Dealer - December 2019 - 44
Digital Dealer - December 2019 - Five Tips to Improve the Sales to Service Handoff
Digital Dealer - December 2019 - 46
Digital Dealer - December 2019 - Seasons of Opportunities
Digital Dealer - December 2019 - 48
Digital Dealer - December 2019 - Cover3
Digital Dealer - December 2019 - Cover4
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