Ah, there’s nothing quite like the New Year to bring out the tradition-loving and hopeful sides in all of us in the auto dealer industry. We’ve sprinted and stressed and smiled our way through the holiday sale season. We’ve spent cherished time with our loved ones, and tolerable time with our in-laws. We even sang along to “Auld Lang Syne” without a single clue what the lyrics are. But now, as the new year dawns, it seems it’s time for another collective tradition: Making dealer resolutions, before quickly abandoning them and hoping no one notices!
Or is it? Independent dealers are models of continuous improvement and hard work. With that same spirit in mind, perhaps it’s time we give the tradition of giving up the old heave-ho, and buckle down with some attainable, actionable, and realistic New Year’s resolutions to better your dealership in 2024.
Dealer Resolution #1: Expand your used vehicle inventory sources
One big area of focus for used car dealerships in 2024 is how to build and grow on-lot inventory. What does this mean? For one, this shift in priority hints at a significant change in the market dynamics and the potential increase in dealer-to-dealer wholesale activities. But it also means that dealers need to expand their options when it comes to acquiring inventory, such as with:
- In-Person Auctions: Traditional in-person auctions continue to be a reliable source for dealers to procure used vehicles. These events provide opportunities to assess vehicles firsthand, interact with sellers, and make immediate purchasing decisions based on physical inspection.
- 24/7 Online Auction Marketplaces: The rise of online auction platforms has revolutionized vehicle procurement. These platforms offer dealers the flexibility to bid on a diverse range of vehicles from the comfort of their offices or homes, transcending geographical limitations and providing access to a broader inventory pool.
- Pursuing Salvage Vehicles: Some dealers are tapping into salvage vehicles as a viable source for inventory expansion. With the right expertise and resources, salvaged vehicles can be refurbished and sold at competitive prices, catering to a niche market segment.
- Leveraging Consumer Trade-Ins: Encouraging consumers to trade in their vehicles while purchasing a new one can be a mutually beneficial arrangement. Dealers gain a fresh inventory source, while customers find a hassle-free way to upgrade their vehicles.
Regardless of the inventory strategy you choose in 2024, choosing AFC as your floorplan financing partner means you’re not restricted in your purchases. We accept purchases from over 1,300 inventory sources, including customer trade-in, dealer-to-dealer trades, and non-auction purchases.
Dealer Resolution #2: Improve Your Reconditioning Time
In an industry built on self-starters and drive, finding success is not about working harder; it’s about working smarter. That’s where a streamlined reconditioning workflow could make all the difference. The process of preparing newly acquired cars ready for sale can have a significant impact on vehicle turn time and keep your inventory from aging on the lot in 2024.
Identifying bottlenecks in the reconditioning workflow is the first step towards enhancing efficiency. Whether it’s delays in sourcing parts, a shortage of skilled labor, or inefficient processes, understanding these hurdles is crucial. Implementing strategies to overcome these bottlenecks can significantly speed up the reconditioning process.
One such strategy is an “auto-approve” system. This involves setting a baseline cost for reconditioning services. By pre-defining the acceptable cost for repairs, the service department can swiftly greenlight work falling below that threshold, eliminating unnecessary delays.
Another approach for your reconditioning efficiency is to choose auctions that offer reconditioning services, and then floor those reconditioning expenses with AFC. Rather than dipping into on-hand cash, dealers can purchase auction vehicles with their revolving line of credit and include reconditioning and transportation costs on the bill of sale. This means you’ll have the inventory you need frontline ready much more quickly.
BONUS RESOURCE: Check out the Top 5 Problems Dealers Face When Reconditioning Auto Inventory
Dealer Resolution #3: Choose the right floorplan provider
If you’re looking to make a serious change for the better in 2024, the best place to start is from the floor up. Floorplan financing can supercharge your inventory purchasing power and empower your dealership to compete in an already-competitive market like used auto retail. As opposed to funding your inventory purchases with revenue, which limits your vehicle acquisition to whatever cash you have on hand, floorplan financing provides a revolving line of credit. That means dealers can purchase the vehicles they need now, and simply repay as vehicles are sold.
Of course, with great power comes great responsibility. As with any financial service, it’s important for dealers to choose floorplan companies who approach lending in a manner that promotes safe, measured, and sustainable growth. If you’re choosing between floorplan lenders, here are a couple great questions to ask during the vetting process:
- Is my dealership financially prepared for a floorplan loan?
- Is my dealership eligible for floorplan financing?
- Which floorplan is right for my dealership? Why?
- What are the terms of the dealer floorplan financing agreement?
- How will I acquire and manage my inventory?
NEW TO FLOORPLANS? Click here to read 5 Things to Consider Before Your First Floorplan!
At AFC, we’ve been helping independent dealers make the most of their lots since 1987. Our flexible dealer floorplans are always tailored to your individual needs. While dealer floorplans may be the key service we provide, what drives us every day is the desire to help independent dealers bring their business dreams to life. And we mean it too–with a combination of physical branch locations and remote industry experts strategically placed across US and Canada, we live and serve in your communities.
Make AFC your floorplan financing partner for 2024, and many more to come
Ready to make 2024 the best year ever? Contact AFC today to start your application for floorplan inventory financing.
Disclaimer: Descriptions of AFC floorplans are for illustrative purposes only. Terms of AFC floorplan financing are subject to a final written agreement acceptable with AFC. AFC does not guarantee any results for floorplan financing and examples are for illustrative purposes only. Dealers should consult their own advisors to make independent business decisions regarding floorplan financing. AFC is not affiliated with any of the companies mentioned in this article.
