Inventory Purchasing
Inventory Purchasing
Your collection system starts with the inventory you purchase! Purchase quality vehicles that are desirable and will run the term of the financing.
We believe that buying inventory is more difficult than collecting accounts.
One of the greatest challenges we face is our ability to consistently purchase and maintain an inventory of vehicles that can be sold within 30 days. By maintaining a quality inventory, the dealership will be more likely to consistently sell cars and will experience fewer collection problems. As we all know customers are more likely to pay for a car that they can drive, not one that is in the repair shop.
You need to be constantly cultivating new inventory sources, try different auctions outside your immediate area if possible. Just about every new car store has a used car manager. This is a great place to find one owner vehicles with less miles. Build relationships with wholesalers you trust to find inventory. Buying the right inventory at the right price is hard. It is not impossible. You must have a good inventory purchasing game plan and execute it every day. Getting too low, then trying to process a large batch of new purchases is disruptive. New inventory coming in every other day or a couple of times a week, is manageable. You need to have a buyer disclose and/or inspection checklist. These will come into play when a vehicle is purchased with a known issue or defect vs. the buyer missed an issue or defect. Paint & body, major mechanical, and over reconditioning can be avoided or the purchase price should reflect the know issues.
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Your opening sentence speaks volumes. So often, we think of the collection process starting when the customer misses a payment. The better the car, the more likely the car payment is at the top of the budget to pay first.
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A car that runs usually gets paid for. What steps to you recommend to assure I am buying a quality car? and what should my average purchase price be?
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Eddie Quality control starts with the purchasing agent and knowing who they are buying from and what they are buying. No matter who or where you choose to buy from, a pre-purchase vehicle inspection checklist should be done to start the paper trail of quality control. Vehicles that can be purchased in the $4000 to $4500 price range with $1000 or less of added expense tend to be the most affordable for our customer.
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