We all know pre-owned is hot right now. Even though many customers are beginning to recover from tough economic times and are starting to return to dealerships, a lot have learned about cutting back and don’t plan on spending like they used to. Others will always seek a lower price, so used units continue to be a draw.
About half of the dealers surveyed by Powersports Business in its recent Dealer Game Plan Survey said they saw increases in pre-owned sales in 2011. It appears they found the formula for making pre-owned another successful profit center at their dealerships.
One of those dealers who saw success in 2011 was Joe Askins of Off-Road Express in Erie, Pa. Askins’ dealership sold about seven more units per month last year than it did in 2010. The growth followed a concerted effort by his dealership to increase pre-owned sales.
“We noticed a lot of opportunity, and we tried to purchase units in the off-season, for example, sleds in spring and summer, stock up on bikes in the winter,” he told Powersports Business. “By doing so, it enabled us to get units for behind market value. We were buying and taking out-of-season trade-ins when most dealers were not, although we were also buying all during in-season as well.”
He attributes his dealership’s 2011 pre-owned success to lessons learned from his Auto Express Suzuki car dealership, his advertising efforts and the numerous events the dealership hosted or sponsored. Off-Road Express hosts a weekly bike night at the local Quaker Steak & Lube, sponsors the Roar the Shore event that brings 20,000 riders to Erie, shows new and pre-owned bikes at the Auto Express Suzuki booth at the Erie Auto Show and displays pre-owned ATVs, UTVs and scooters at a local RV/outdoors show.
Askins also makes significant investments in his new inventory, which contributed to his success last year, and he expects will help with 2012 sales.
“We invest in our pre-owned by never stop buying,” he said. “We own all our used units; we don't floorplan our used, and I feel our money is better in used inventory than in the bank. Our dealership also has many local lenders that we have formed relationships with that have great rates for our pre-owned buyers.”
Askins is making a special push in 2012 to buy more pre-owned Harley-Davidsons because he’s seen interest from his customers. He also plans to begin stocking the pre-owned department in his second Off-Road Express location in Erie, which he opened in August. Read about his winning Honda ATV holiday promotion here.
“My advice to other dealers is don't be afraid to invest in pre-owned; it is better than money in the bank, and try to develop relationships with local banks and finance companies,” he said. “Our industry is very competitive, and the prices on our new units are all very similar, so there is great opportunity in pre-owned as no two vehicles are the same, therefore our profit opportunity becomes greater, plus hopefully it becomes another customer for our service department, and maybe if we are lucky we will get it back on trade sooner than later.”
Askins’ story is just an inkling of what I learned recently when talking to dealers about their 2011 successes and projections for 2012. In the upcoming issue of Powersports Business, see a full story on pre-owned success, a story about dealers with new unit progress, along with loads of other great coverage. The issue mails next week and will be available at our booth (#4939) at Dealer Expo. I hope to see many of you next week!
Liz Hochstedler is the associate editor of Powersports Business, a trade magazine for the powersports industry. She reports on the powersports industry through Powersports Business’ varied media, including in the magazine and online. She assembles the brand’s twice-a-week e-news and handles a variety of assignments for the magazine. Powersports Business is known for its exclusive national dealer surveys, in-depth industry analysis and dealership conference, Profit Xcelerator.