Whether you own a car dealership or simply own a car, you’re probably familiar with the semiconductor chip shortage that has been plaguing the automotive industry for the last couple of years. The chip shortage has had detrimental effects on the production of new cars in the US and experts don’t expect a full pre-pandemic recovery until 2023.
The federal government has introduced measures to alleviate the vehicle inventory shortage, including a multi-billion-dollar bill to subsidize chip manufacturing and research state-side. However, major automakers like Ford and Toyota are looking to keep car production at lower levels for the long term in an effort to reduce overhead costs. With so much uncertainty around the future of vehicle production, how can dealers combat the vehicle inventory shortage and secure profits?
Finding Potential in the Used Car Market
Even though the new vehicle inventories are in short supply, demand for vehicles is still high. Consumers have been turning toward used cars to evade long new car waitlists, and the market is booming. Used car prices are up more than 40% from pre-pandemic levels and the average used car is going for nearly $30,000.
New car dealerships across the country have started expanding their offerings to include used cars and used car dealerships are trying their best to keep up with high demand. Dealers have started acquiring previously “unsellable” used vehicles, sometimes with 200,000 plus miles, and are able to move them off the lot with ease. If the vehicle inventory shortage has taught dealers one thing, it’s not to overlook potential opportunities.
Leveraging Trade-ins To Build Inventory
To capitalize on high used vehicle demand, dealers first need a way to acquire pre-owned cars and build their inventory. Instead of waiting to source used cars in an auction, dealers should optimize their acquiring strategies by focusing on customer trade-ins. On average, trade-ins turn 10 days faster and make $1,000 more profit than auction-sourced vehicles. Trade-ins are easy to acquire—if you have the right tools.
Utilizing direct automotive marketing through in-app messaging enables dealers to reach out directly to customers for trade-in requests. Not only do automated push notifications and in-app marketing drive return customer sales, but dealership apps can also be used to target existing customers who are likely to trade in their used vehicles.
Increase Trade-ins with CarRx
The CarRx app allows dealerships to precisely target automated marketing campaigns to customers with used vehicles who might be interested in a trade-in deal. With CarRx, you can customize messaging with special trade-in promotions, discounts, and deals to entice customers to offer up their used cars.
Plus, CarRx targeted marketing features allow you to send out messages based on certain vehicle features including car make, model, year, mileage, and more. Knowing the full vehicle health history in detail before making an offer enables you to send messages to customers who meet your specific criteria. All this without wasting time and money on expensive advertising.
The service department is also a great place to inquire customers about a potential trade-in. Since the CarRx app can be used to alert customers of service needs, you can use predictive messaging to drive traffic to your service bay and secure more trade-in deals. Amid this vehicle inventory shortage, there’s no better way to grow your used vehicle fleet.
Curb the Vehicle Inventory Shortage with Elo GPS and CarRx
When used with Elo GPS, the CarRx app for drivers automatically runs automotive diagnostic scans, sends recommendations for vehicle maintenance, and enables users to schedule maintenance at your dealership—right from their smartphone. Customizable in-app messaging allows you to send messages directly to your customer’s phone, so you can spend less on costly ad campaigns while driving revenue to your business.
Interested in giving CarRx a go? Talk to one of our representatives to learn more.