By Jim Piraino
How many times have we heard this objection? I have to admit that in some cases it may be true. However, the recent tragedy in the Northeast may have an effect on our customers’ decisions to invest in vehicles that they think have little or no value.
Statistics show that hurricane Katrina eliminated 674,000 vehicles from our national fleet due to water or some other damage. In the recent storm, Hurricane Sandy, the numbers are not in, but are expected to surpass those of Katrina. When we take those lost vehicles, add them to the “Cash for Clunkers” program, and factor in the slow new car sales of recent years, the result is a very low inventory of used cars.
You may have read that the new car market is rebounding. However, they are speaking in terms of profits, and yes, most manufacturers are making profits. However, the number of new cars being sold is about half of the peak of the 18,000,000 sold annually several years ago. Again, the net result is fewer used vehicles available, and “supply vs. demand” is ruling the market. Demand is winning with higher prices on used vehicles.
The point is this; your customers may simply not know the real (current) value of their vehicles or what it would cost to replace them. I recently watched a local news report while in San Diego, during which they addressed this very subject. They reported a $700-$1,000 increase in the average used car value, and rising. San Diego is a long way from the storm-affected areas where the demand is higher, and surely the values are as well.
Please take a moment to visit some of the websites that place values on used vehicles. Check the value of your own vehicle and you will see firsthand what I am describing. Armed with that knowledge and the above information, you will be prepared to help your customers by educating them on the real values of their vehicles, and you will have a much better opportunity to make the sale.
This article was contributed by Jim Piraino, one of the 1-on-1 coaches who helps shop owners through the Elite Coaching Program.