Page 10 - MIADA-q42020

The Ramifications of Price Increases

By Sean Reyes, Chief Marketing Officer, Recall Masters

Dealerships are having a tough time vehicle condition. I heard about a dealer Remember, selling a pre-owned vehicle
acquiring used vehicle inventory at who recently purchased a vehicle for with an open recall, while legal, does not
competitive prices right now. Due to recent their front-line inventory from a well- protect a dealer from state product liability
OEM shutdowns, new car models are sparse. known auction company. In the pictures laws and a wrongful death lawsuit should
And, even with large rebates, incentives, and description, it looked like a desirable an accident occur as a direct result of the
and low interest rates, consumers are being vehicle. However, when the dealer received defect.
especially careful with their finances in it there was a Confederate flag etched into
these tumultuous times and are shopping the rear window. Not a sticker, mind you Gross profit is vital, but so is the safety of
for used vehicles more than ever before. but etched into the glass. This dealer would the consumer. Finding a balance between
have to replace the whole rear window to the two in these times will enhance
To compound the problem, dealers find make it desirable at a considerable expense. your dealership’s reputation, customer
themselves overpaying for inventory confidence, and, ultimately, earn loyalty
through traditional auctions and then have Dealers are turning inventory faster than and return business. As well as protect your
to pass those high prices and the various ever for the simple fact that there is less dealership from those costly lawsuits. n
auction fees that go along with them onto inventory. Even with the cost of used car
the consumer. Not only that, but they also prices being blamed for cost of living Sean Reyes oversees all marketing efforts at
have to trust the vehicle’s condition as it increases, the fact remains that there are Recall Masters as Chief Marketing Officer.
is presented to them – all in the name of plenty of consumers out there that not only Sean’s experience spans more than 25 years
having a healthy volume of inventory want new (or new to them) vehicles but of business development and strategic
available for those consumers who are may actually NEED them. marketing experience, having worked in
shopping. the automotive, healthcare, finance and
The Catch-22 here is that some dealers technology industries to serve customers
A recent article, based on research published may be so focused on inventory turn they like American Express, Toshiba, Western
by the Department of Labor, indicates that might neglect safety issues before selling Digital, Cox Communications, Gateway,
the cost of living has increased and credits the vehicle, especially in the current climate Novartis, Microsoft, IBM, Compaq,
“used car prices for the increase.” While where they are paying higher than normal HP, Confident Financial Solutions,
the market dictates supply and demand, as values simply to have inventory on their MyCustomerData, Toyota of Orange, and
it would at any time, right now the market lots. Fletcher Jones Mercedes Benz. While he
is increasingly challenging for both dealers has an accomplished portfolio of design,
and consumers. On the one side, you We are certainly in difficult times. Dealers production and coding skills, his strength
have dealers trying to keep a well-stocked – just like any other business – have the is in “go-to-market” business modeling and
inventory. And on the other, consumers are right, but also the need to be profitable. digital marketing strategies. Sean spends his
finding used cars more expensive than ever Consumers still need vehicles and want to free with his family,, time hiking, kayaking,
before. buy them. But there is an ethical dilemma playing guitar and going to concerts with his
this situation presents. Do you flip a car kids.
Dealers are forced to trust auction quickly that may be unsafe for the buyer
inspectors to accurately represent the or ensure that all vehicles sold are safe?

10 | MIADA MISSISSIPPI DEALER Q4 2020