Used Car Acquisition Costs - 1st Party vs. Auction

[Alex Snyder]

Did a little digging in a few years of DMS data. I wanted to see the dollar difference between auction-sourced cars and trades/street buys/lease captures.

Customer-sourced cars grossed $3,102 and sat 23 days. The auction cars grossed $2,100 and sat 36 days.

Take an interactive tour of how it all adds up. Build yourself an argument for why your store should invest in better ways to pull great used cars from your own database (+ service drive). Acquiring from your Customers vs. Buying from the Auction - VehicleLyfe

 

[KennySmithAutoUnite]

Did a little digging in a few years of DMS data. I wanted to see the dollar difference between auction-sourced cars and trades/street buys/lease captures.

Customer-sourced cars grossed $3,102 and sat 23 days. The auction cars grossed $2,100 and sat 36 days.

Take an interactive tour of how it all adds up. Build yourself an argument for why your store should invest in better ways to pull great used cars from your own database (+ service drive). Acquiring from your Customers vs. Buying from the Auction - VehicleLyfe

View attachment 11596

Alex, this is where the real advantage of buying from your own customers shows up.


It is not just the $1,002 more gross. You are also looking at 13 fewer days in inventory, no auction fee, no transport, and usually a much better idea of what you are buying before it hits recon.


The part I would want to see next is total net after acquisition cost, recon, holding cost and wholesale loss. That would tell the whole story.


Auction is always going to have a place because you cannot build the entire inventory mix from trades and service customers. But if a store has a big CRM and service drive and is still treating the auction as its first acquisition source, there is probably a lot of gross sitting right in its own database.


The best used car to buy is often the one you already know.

 

[Alex Snyder]

The part I would want to see next is total net after acquisition cost, recon, holding cost and wholesale loss. That would tell the whole story.

Check out the interactive tour Acquiring from your Customers vs. Buying from the Auction - VehicleLyfe

 

[joe.pistell]

Love the visuals!



620k deals! wow.
I see lease returns breakout, any chance to look at other sourcing? Service acquisition as a stand alone would be very interesting.

 

[DanMorgan]

Great write up Alex...I'm only 1/3 of the way through reading it all. I still can't believe the difference in gross is only $1000.....Quick thought would it would be more gross on the cars bought in the lane versus auction but then as I type this I'm thinking I'd have zero issues stepping up on a car in my lane, especially if I have a multi-point inspection knowing exactly what I have to deal with as far as recon goes, and if it helps me be aggressive to get a deal now.

I just wish it wasn't so hard to find salespeople willing to put in the busy work to work the lane. It's easy to get people to start but keeping them going is the tough part (and that's with a good comp plan and incentivizing the writers for the referrals).

 

[joe.pistell]

I just wish it wasn't so hard to find salespeople willing to put in the busy work to work the lane. It's easy to get people to start but keeping them going is the tough part (and that's with a good comp plan and incentivizing the writers for the referrals)

hmmmm