Stop giving away additional, incremental sales and gross! Today's NCMi Up To Speed blog discusses how to set up an AS-IS used car sales process in your store.    

If you're not in the AS-IS used vehicle business, you should be!

By Garry House, Director, NCM Institute

Here’s your Statement of Strategy:

To provide incremental and additional sales and gross opportunities to the Used Vehi­cle department. This involves the sale of vehicles that normally would be wholesaled or disposed of at auction and ultimately end up on a Buy Here, Pay Here or “B” lot. They are older and higher mileage vehicles that dealers normally do not sell because of management’s fear of the customer “heat” normally encountered with the sale of these vehicles as a result of improper rep­resentation by management and the sales staff.

Here’s How You Execute the AS-IS Used Vehicle Sales Process:

• Location – The location of these vehicles on your lot, in relationship to the rest of the used vehicle inventory that is for sale, is critical to the message that you give to your customers. These vehicles should be segregated from the rest of the inventory at all times.  
• Display Materials - These vehicles should be clearly identified “AS-IS,” with a competitive selling price, and very lit­tle price negotiation should occur on this type of merchandise. The price sticker should also clearly state the AS-IS condition of the vehicle being offered for sale.  
• Inspection - These vehicles should be inspected by the service department to determine if the vehicle is safe to offer for sale. It is a Pass/Fail inspection to protect the dealership from a liability situation vs. a total reconditioning process to make a vehicle front row ready.
• Price Range - While any price range of AS-IS vehicles can and have been sold, gener­ally speaking, the ideal vehicles are those that can be sold for $7,500.00 or less. Do not underestimate the power of being able to advertise, “We have vehicles as low as $695.00.”
• What do we tell the customer? That the vehicle is being offered for sale AS-IS. If the customer asks if the vehicle has been inspected, the answer is “No, but you are welcome to take it to a mechanic of your choice before purchasing it if you would like to.” If the customer continues to ask about condition or possible warranty, they should be stepped up to a vehicle in stock with a warranty.
• Internal Identification - We suggest that the deal folders for AS-IS vehicles be color coded to reflect what they are. If you use a green folder or manila folder for your deals currently, use a blue or red folder for all AS-IS vehicles. The object is that we want everyone to be able to identify the type of sale (AS-IS) the vehicle represents. If the customer shows up in service two weeks after purchase and a service advisor pulls his file, he knows right away that the customer has no warranty. If a man­ager gets involved in a deal, he understands the condition of the sale right away, and the finance department understands that they cannot sell a warranty on the vehicle.
• Customer Disclaimer - There should be a disclaimer of “non-warranty/as-is condition” signed by the customer at the time of sale in every deal. This should clearly state the condition of the sale of the vehicle and should be countersigned by a manager at the dealership with a copy given to the customer at time of delivery.
• Success - The keys to success in selling AS-IS vehicles, and in capturing the gross we cur­rently allow our competitors to take from us, is in the training of the sales staff to prop­erly represent the vehicles for what they are, and in the manner in which we display the vehicles. If the above guidelines are followed and all parties involved understand the condi­tion of the sale (AS-IS) you will appreciate the additional and incremental units and gross that these vehicles represent without the traditional grief we commonly associate with these types of vehicle sales.

Selling vehicles AS-IS is just one of the best practices taught in the NCMi Principles of Used Vehicle Management. program.  For more insightful best practices, read the NCMi Up To Speed blog.

Garry House serves as the director of the NCM Institute and has nearly 25 years experience as consultant to automotive dealers.  Garry gained his retail automotive experience working in dealerships as a department manager, general manager and dealer principal, and as an employee of General Motors Corporation.  Garry studied Industrial Engineering at General Motors Institute in Flint, MI and Liberal Arts at Hamilton College in Clinton, NY.  He currently resides in Jupiter, Florida.  Contact Garry through the NCM Institute at 866.756.2620 or email ghouse@ncm20.com.