Steve Kaputsa, Senior Vice President of Remarketing Services at Ally, explains how dealers can consider sourcing used vehicles and how they can get creative with inventory.
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Jackie Charniga: Hello everyone. This is Jackie Charniga with Automotive News and welcome to the All Ears podcast. This podcast is sponsored by Ally Financial and produced by Automotive News Content Studio. In each episode, we cover topics important to automotive retail executives. We’re calling on Ally leaders to share their expertise and knowledge to help dealers and others navigate transformational changes in the industry successfully. Today we meet Steve Kapusta, Senior Vice President of Remarketing Services for Ally. We’ll discuss ways dealers can consider sourcing used vehicles and how to get creative with the inventory they have in the field. Hi Steve. Thank you very much for taking the time.
Steve Kapusta: Hello Jackie. Great to be here with you.
JC: It seems that in this current market everyone is trying to get their hands on vehicles as fast as possible and trying to find ways to make it easier for the consumer to sell. Some dealerships offer ways for customers to get instant payments for their cars, even on weekends. Other vendors are creating technology platforms to connect consumers who are ready to sell with resellers who are ready to buy or to connect resellers with each other. Steve, what do you think of the potential of these new technologies and the impact they could have on the recovery opportunities that dealerships have traditionally relied on? SK: I would say the different technologies that are coming out are really amazing. If you are a customer, it works extremely well the opportunities you have to get instant quotes on your vehicles. I think on the dealer side, it opens the door to opportunities for trade-ins and vehicle purchases that they never had the opportunity to access because before, consumers would come to the dealership and look for to get an offer on their trade-in or have someone look at their vehicle and give them a price. With the technology we have today, in many cases there are three to five different opportunities for consumers to get their vehicle appraised before they even leave their home. And from there, they can manage the buying experience at the dealership in a whole different way. But for the dealer, which is obviously a big part of why the technology is coming, it just opens the door to so many more opportunities to buy used vehicles than they’ve ever had in the past and it’s very efficient and very efficient way to get new inventory.
JC: Let’s talk about the inventory they get on the trade. The sticker clash has led many car buyers to seek out cheaper options. Some OEMs are starting to pre-certify vehicles for up to ten years, which was perhaps unheard of 20 years ago. But some dealers say cheaper older models, especially small cars, are particularly attractive to younger customers, a few of whom we have on the new-vehicle side. So what are some of the pros and cons for dealerships in sourcing and selling older vehicles?
Sask. : This is a very large area that we have a lack of inventory in space. A number of consumers who used to trade in that older vehicle to get a newer vehicle have slowed down their toning process and they’re keeping their cars longer, so that’s really making older car inventory at low mileage a big problem for dealership customers and as a result, the consumer sees less of an opportunity on these types of cars. Many of these transactions tend to happen and dealerships tend to do good in the service aisle to consumers who come in to have their vehicle serviced and certainly give them a quote for their vehicle. Then the price is much higher than they expected and their like “whoa this is very interesting”. Then he moves on to the next discussion of “I need to get a replacement car.” I think what we’re stuck in today is that it’s hard to get that replacement car, so it’s harder to get the car that’s a bit older with more mileage. Dealers do this with unique opportunities and take advantage of different things day in and day out. I would share with the team that when we look at these older cars with more mileage and all, one of the things that a lot of dealership customers have to think about is getting an extended service agreement or warranty agreement on these vehicles . I think as we can all imagine and it’s happened to us along the way, you could potentially be on a budget even for that older used car and if something unexpected happens with your vehicle, the contract of service can really make this much easier. on an individual’s budget.
JC: I wanted to follow up a bit on what you said about helping dealers acquire vehicles in the service lane. Especially older models for franchise dealerships or independent dealerships they are looking to find and stock up on inventory. What might they be looking for in terms of good vehicles for sale that come through their service line?
Sask.: I think the most important thing that comes to mind is that when someone goes through the service line, it’s not the first time. They buy a vehicle that they maintain and/or are generally familiar with the history of that vehicle, how it has been serviced and how it has been serviced. This allows the dealer to stretch or invest more money in that trade than another they don’t know as much about. I think that’s why you see a lot of stuff happening today, but there’s also a lot of stuff happening outside of this marketplace on Facebook Marketplace, on Craigslist and things like that where dealers are buying and buying now direct-to-consumer vehicles and in these types of environments as well.
JC: Any final advice for dealers as we navigate this environment?
Sask. : I think the biggest piece of advice given to the industry in over thirty years is generally not on your side. Turnaround time is coming back to be really important, think dealers who focus on that and know some of these pre-COVID strategies are going to be really successful. And I would say to resellers, wholesalers, etc., it’s really important to look everywhere, not just a market, not a single opportunity, because you’re not going to find everything you want. But if you open the door to several different ways to buy and buy cars, you will find a recipe that works best for you, and it will turn out to be quite successful, even when it is difficult to find really nice cars in the world. ‘opportunity. cars.
JC: That’s it for this episode of the All Ears podcast. Many thanks to Steve for his ideas. On behalf of Ally and Automotive News Content Studio, thank you for listening.
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