My Honda store buys 30 -40 vehicles per month from private sellers (not our customers) in a market of a little over a million people. For those looking to acquire vehicles privately, here are some tips:
1) Develop a consistent repeatable process. The biggest mistake that dealers make is that they manage to get customers in for an appraisal and they just hit them with a number as if they were a wholesaler or other dealer. We don't sell cars to individuals that way, so we aren't going to be successful buying them that way either. Your process should include:
a) Give them a reason to come in for an appraisal - we offer them a free Carfax on their car and a printed market value analysis
(we use the vAuto report) and we advise them that we will cut a check on the spot and give them a ride home if they transact
with us.
b) When the customer arrives, don't leave them waiting. Then explain the process, promptly complete the appraisal, and explain
how you got to your number including reconditioning, dealership profit, etc
c) Recognize that you will only close 10 -15% of those customers who show on first visit (if you do a good job) but if you treat them well and they have a positive experience, many of them will come back (our close ratio including Be Back is over 20%), after they are unable to sell their vehicle privately.
2) Put sufficient resources into the effort. Dealers think nothing of paying $400 - $500 per unit as an auction fee and having their
Used Car Manager out of the dealership to overpay for cars at the auction but bristle at the the notion of spending money on people to execute this process properly within the dealership. We have a full time private acquisition buyer and another BDC member to manage appointments, answer the phone, conduct proper follow up etc.
3) Technology is your friend. We use the Vehicle Acquisition Network software (VAN) that automates the outbound contacts to private sellers. It works very well but like any software, you need to develop the processes and discipline around using the software to be successful.
