The business environment for the bold entrepreneurs who own and operate independent auto dealerships face many new challenges. Let’s take a look at five of the biggest.
1. More Competition
The internet keeps making the world smaller, so local car dealers no longer just compete with the dealer down the street and across town. All-online auto retailers continue to grow their share of the market, and many franchise dealerships in even small towns sell cars to the world.
Smart independent dealers use technology and relationships with companies in the auto remarketing industry to offer more value to their customers to compensate.
2. Finding Inventory
With more dealers competing for the supply of used cars than ever before, it can be difficult to find inventory at all. Drivers are keeping their vehicles longer, for an average of 12.6 years.
Online wholesale auctions have increased the geography from which dealers can find vehicles, but that has added the complications of figuring out the best way to get a vehicle to the dealership.
Many auto auction sites now offer delivery services to help simplify sourcing. Some integrate with flooring services so when dealers find good vehicles they can buy quickly with a few clicks without tying up their working capital.
3. Rising Prices
More demand for wholesale vehicles with a finite supply means prices will rise. When dealers find the right inventory, it can be hard to get it at a price that leaves enough room for a profit. Transportation expenses, auction fees and other costs also add to the price.
4. Diversifying Customer Expectations
Different customers want to buy vehicles in different ways. Some people still want an old-fashioned, personal experience, while others want a completely digital one. They want to shop from their laptop, communicate through chat messages and email, and sign the paperwork electronically. Sometimes the only contact they want with the dealership is when they pick up the car. And a growing number want the car delivered to them.
Most people want a mix of the two experiences, where they search and research vehicles online and then visit the dealership to see their favorite options in person.
Used car buyers also have access to more information than ever before. With a VIN number, they can get vehicle specifications straight from the manufacturer and find the car’s entire life story. With all this information at their fingertips, buyers expect dealers to be able to provide information about the current condition of the car, and in greater detail than ever before.
A growing number of young buyers want to get insurance options from the dealership, along with financing options. And they want to choose from a menu of options rather than a single offering.
The more forward looking auto auctions like Copart help independent dealers meet these expectations by offering free condition reports, vehicle histories, expert inspections and AI-powered damage scans.
5. Keeping Up With Changing Technology
The pace of new technology keeps increasing because each generation of innovations makes it easier to create the next. Keeping up can be a challenge that requires adopting a mindset of lifelong learning.
Software can share information with other programs and databases for greater efficiency. Dealer inventory management systems can add vehicles directly from auction sites, and list other vehicles on those sites with a single click.
Companies like AuctionACCESS allow dealers to upload their credentials once and then securely share them with multiple online auctions.
In addition, major players in the auto wholesale, insurance, and other related spaces are working together to make title transfers and storage completely digital.
Copart as a Solution
Copart is a technology company that strives to be on the cutting edge of new innovations. We also work hard to partner with dealerships to help them overcome challenges like the ones mentioned above.
Whatever the future may bring for dealers, Copart will be there to help the independents survive and thrive.
