Dealerships across the country are facing an uphill battle when it comes to acquiring used vehicles. Experts point to a variety of factors behind this trend, from COVID-era production slowdowns to fluctuating vehicle values.
However, while some of these challenges may be beyond dealers’ control, industry experts suggest there may be some easy wins that you’re overlooking. By identifying and capitalizing on these missed opportunities, savvy dealers can tap into a new source of used inventory and differentiate themselves from the competition.
Missed Opportunities in Used Vehicle Acquisition
When you’re struggling to acquire used vehicles, you first need to look at where you’re searching for your inventory. According to Cars Commerce EVP and vehicle valuation expert Brian Kramer, the issue lies in the fact that most dealers are relying on the same source: Used car auctions.
“The problem is that high demand vehicles are rarely available at auctions, because they never make it to the auction,” Kramer said in a LinkedIn blog post. “If a high demand unit makes it to the auction, the price to acquire is typically significantly above market value.”
With car auctions too picked over, Kramer advises looking for inventory closer to the source. But the numbers show that even when dealers find trade-ins, they’re letting the profits slip through their fingers. Although acquisition managers report having trouble finding cars, analysts are also seeing a record number of vehicles being sold to CarMax.
In these streamlined acquisition deals, used car retailer CarMax offers dealers $500 per used vehicle in a convenient wholesale process. Then, it turns around and sells the vehicle to a consumer for an average profit of $1,700.
Many dealers see this as a profitable exchange, as it saves time and overhead that would be spent inspecting and evaluating the vehicle. But it may be costing them more in profit than they think. Kramer states that the average trade-in sale earns $2,600 in profit– twice as much as selling a new car.
The hidden way to find more used cars
For most dealers, the best way to source more used vehicles is by taking advantage of what’s coming in your door. That is, finding acquisition opportunities across all touchpoints with your existing customers, from a new sale to a service appointment.
Data shows that many dealerships fail to engage their existing customers in trade-in discussions– even when connecting in-person. For instance, according to a study by Digital Air Strike, nine out of ten service customers say the dealership did not discuss trade-in options with them. By training your staff to initiate these conversations at critical moments in the customer journey, you can identify more opportunities with minimal effort.
How “Owning the Driveway” Can Fuel Your Acquisition Engine
For better or for worse, fixing your vehicle acquisition problem doesn’t happen in a vacuum. But it does boil down to one thing: Knowing your customer. Or, as Sandy Cerami, the OG of Business Development & Sales as well as a former New Car Dealer, terms it, Own The Driveway™.
Own the Driveway™ is a proprietary strategy developed by Academy365 co-founders Sandy Cerami and Ron Marvo to illustrate the value of prospecting customers on a household basis. On its face, it means taking a step back to capture the broader context of each customer– going from a single sale to capture the average 2.3 cars per household.
But in practice, it means becoming the go-to partner for all of your customer’s needs. By building a driveway-level connection, you can unlock opportunities for anything that comes up, including trade-ins, servicing, and repeat sales.
Sandy came up with the idea during a conversation with a repeat client in 2005. As he was thanking them for their business, the customer said, “Sandy, you’ve got to help us. We need to get rid of the vehicles we’ve got in our driveway. We’re starting to look like a used car lot.”
Not only did this open the opportunity for Sandy to sell another vehicle, but he also acquired four used cars in the process. He realized that if every dealer could recreate this process for every customer, they could almost instantly expand their business.
Implementing “Own the Driveway” in the modern age
At the conception of “Own the Driveway,” Sandy was working in the early days of the internet. For that reason, he started to build out the strategy as an analog process, plotting how dealers could build deeper connections with customers to tap into more of their needs.
However, when Sandy met with Modives COO and co-founder Justin Silver, the two discovered how their businesses could work together to provide a playbook for dealers. With CheckMy Driver, dealers can get timely, accurate insights directly from their customer’s insurance policy.
Not only can leveraging this data increase inventory acquisition and sales, but it also offers a better, more personalized customer experience. Over time, continuously reaching out to customers with what they need, when they need it, can help you establish yourself as not only a vendor, but a long-term partner.
Seeing it in action: “Owning the Driveway” with Driver Insights
John is an auto dealer looking to expand his vehicle acquisition strategy. Instead of relying solely on trade-ins that come through the door, he turns to Driver Insights to analyze his existing customer base.
By filtering his CRM for customers with vehicles over five years old on their insurance policies, he can identify potential sellers and assess key details– such as make, model, year, and past claims– to generate competitive offers.
When a customer decides to trade in their vehicle, John also uses this data to guide them toward the best replacement. If their policy includes an older driver, for example, he might recommend cars with features that enhance safety and comfort, like backup cameras, parking assist, and adaptive cruise control.
Once he acquires a vehicle, rather than flipping the trade-in to CarMax for a quick $500, John keeps it in-house, services it, and turns back to Driver Insights– this time, to find the ideal buyer. For instance, he might search his CRM for families with new drivers to see if they’re searching for a reliable used vehicle.
By leveraging customer data at multiple stages, John streamlines his acquisition process, improves customer satisfaction, and increases his bottom line.
Start Increasing Trade-Ins for Your Dealership
“Owning the driveway” isn’t just a tactic for your dealership to adopt– it’s a fundamental shift in how you approach sales and customer relationships. To learn more about how your business can turn on a growth flywheel, check out Academy365 or reach out to Sandy Cerami & Associates.
You can also watch an on-demand version of our webinar “Combining Great Tech and Winning Strategy to Get Ahead in 2025,” where Sandy Cerami and Justin Silver talk about how dealers can leverage new technology to overcome modern challenges and delight their customers.