Steve Kaputsa, Senior Vice President of Remarketing Services at Ally discusses ways that dealers may consider sourcing used vehicles and how they can get creative with the inventory.
Advertisement: It's time to take your dealership from 0 to 100. From dedicated underwriter and account executive teams to comprehensive training courses, Ally has the resources needed to help you take your business to the next level. Contact your local account executive today.
Jackie Charniga: Hi everyone. This is Jackie Charniga with Automotive News and welcome to the All Ears podcast. This podcast is sponsored by Ally Financial and is produced by the Automotive News Content Studio. In each episode, we delve into topics important to executives in automotive retailing. We tap Ally's leaders to share their expertise and knowledge to help dealers and others successfully navigate transformational changes in the industry. Today, we catch up with Steve Kapusta, Senior Vice President of Remarketing Services for Ally. We'll be discussing ways that dealers may consider sourcing used vehicles and how to get creative with the inventory they have on the ground. Hi Steve. Thank you so much for taking the time.
Steve Kapusta: Good morning Jackie. Great to be here with you.
JC: It seems that in this current market, everyone is trying to get their hands on vehicles as fast as they can and try to find ways to make it easier on the consumer to sell. Some dealers are offering customers ways to get instant payments for their cars, even on the weekend. Other vendors are creating technology platforms to connect consumers ready to sell with dealers ready to buy or connect dealers with each other. Steve, what do you think about the potential of these new technologies and any impact they might have on the trade-in opportunities dealers traditionally rely on?
SK: I would say that the different technologies that are coming out are truly incredible. If you're a customer, it's working out extremely well the opportunities that you have to get instant quotes on your vehicles. I think from the dealer segment side of it, it's opening up the door to opportunities for trade-ins and opportunities for vehicle purchases that they've never had an opportunity to get to because in the old days, consumers would come into the dealership and look to get an offer on their trade in or have somebody look at their vehicle and give them a price. With the technology that we have out there today, in many cases, there's three to five different opportunities for consumers to get a valuation of their vehicle before they even leave their home. And then from there, they can handle the shopping experience at the dealership in a totally different way. But for the dealer, which obviously is a lot of the reason the technology's coming out there, it's just opening up the door to so many more opportunities for used vehicle purchases than they've ever had in the past and it's very efficient and a very effective way to get new inventory.
JC: Let's talk about the inventory that they are getting on trade. Sticker shock has led many car shoppers to look for less expensive options. Some OEMs are starting to pre-certify vehicles up to ten years old, something that might have been unheard of 20 years ago. But some dealers say that less expensive older models, especially smaller cars, are particularly attractive to younger customers, which we have a few of in the new vehicles side. So, what are some of the pluses and minuses for dealers in sourcing and selling older vehicles?
SK: It is a really big area that we have a lack of inventory in the space. A number of consumers that used to trade that older vehicle to get a newer vehicle have slowed down their turn process and they're keeping their cars longer, so it's really making inventory on older little higher mile mileage cars a big problem for dealer customers and hence consumer is seeing less opportunity there on those types of cars. Many of those transactions tend to happen and dealers tend to do really good in the service aisle on consumers coming in to get their vehicle serviced and certainly giving them a quote on their vehicle. Then the price is much higher than they expected and their like "whoa this is very interesting." Then, it turns to the next discussion of “I have to get a replacement car.” I think what we're caught in today is it's difficult to get that replacement car so it's harder to get the car that's a little bit older with more mileage on it. Dealers are getting it done with unique opportunities and leveraging different things day in and day out. I would share with the team that as we take a look at these older cars with more mileage and everything, one of the things that a lot of dealer customers have to think about is getting an extended service agreement or warranty agreement on those vehicles. I think as we all can imagine and have happened to us along the way is you could be potentially on a budget even for that older used car and if an unexpected issue comes up with your vehicle, the service contract can really make that a lot easier on an individual's budget.
JC: I wanted to drill in a little bit to what you said about helping dealers acquire vehicles in the service lane. Especially older models for franchised dealers or independent dealers, they're looking to find and source inventory. What might they be looking for in terms of the right vehicles to sell that come through their service line?
SK: I think the biggest thing that comes to top of mind for me is when somebody comes through the service line, it's not the first time. They're buying a vehicle that they tend and or usually know a lot about the history of that vehicle and how it was taken care of and how it was serviced. That enables the dealer to stretch or put more money into that trade than one that they don't know as much about. I think that's why you see a lot of that happening today but there's also a lot happening outside that marketplace on Facebook Marketplace, on Craigslist and things like that where dealers are now actually shopping and purchasing vehicles directly from the consumer and in those types of environments as well.
JC: Any final pieces of advice for dealers as we move through this environment?
SK: I think that the biggest piece of advice being in industry for thirty plus years’ time is usually not on your side. Turn time is coming back to be really important think the dealers that focus in on that and know go back to some of those pre-COVID strategies going to be really successful. And I would say to dealers out there, wholesalers, etc., it's really important to look everywhere, not just one marketplace, not just one opportunity, because you're not going to find everything you want. But if you open up the door to multiple different ways of purchasing and buying cars, you’ll come up with a recipe that works best for you and it'll turn out to be pretty successful, even when it's tough to find really nice used cars.
JC: That's it for this episode of the All Ears podcast. A big thank you to Steve for providing his insights. On behalf of Ally and the Automotive News Content Studio, thanks for listening.
Advertisement: Want to run laps around your previous business goals Ally has the resources and tools to help your dealership succeed. From dedicated underwriter and account executive teams, customized solutions and comprehensive training courses, Ally can help your business crush every lap. Ready to get started? Contact your local Ally account executive today.