I’ve had a number of emails and phone calls asking about a strategy to deal with the increased value of used cars due to the recent hurricanes.
No doubt, the law of supply and demand will increase the prices you pay and the value of used cars in the marketplace. As you get all jacked up and excited about running out and paying the “market price” for used cars, keep the following in mind:
A. Know your market and know your lenders. The market may not be willing to reimburse you for the added values, and for sure the lenders may not be willing to advance the money you need to make it work.
B. This is a short-term blip on the map. If you think this is a “new business model” that you’re going to see for much more than 45 to 90 days, you’re going to wake up with an ugly mess.
C. Avoid jumping too heavily into the game. Now is not the time to go nuts at the auction. Now is the time to go nuts at the front door. If you’re going to bury yourself, then bury yourself in a trade. You made a deal. You sold a car. You have a new customer. Dig it?
D. Amp up your discipline. I feel the same way about the fake news I hear about off-lease cars coming into the market and affecting used car values. If you know what you’re doing, and have discipline, then most of this stuff will have little or no impact on your used car operations.
E. Even if you are in Texas, Florida, Georgia, Alabama, Louisiana or South Carolina, you have to think turn baby turn. When you turn your inventory, the law of supply and demand will only impact you but so much. You will win because you’re smart.
I know you’re smart because you read my stuff. Don’t get stupid. That’s all I’m gonna say, Tommy Gibbs