By Tom Gregg
Founder and CEO,
Vehicle Acquisition Network
Last year, there were over 43 million cars sold in the U.S., with around 27% of those transactions occurring through private-party sales. As someone deeply rooted in the dealership environment, it is crucial for dealers to actively participate in reducing the percentage of consumer-to-consumer transactions. The following five profound principles can empower any dealership to implement a successful strategy for purchasing cars from private sellers.
Five Principles for a Successful
Strategy for Purchasing Cars from Private Sellers
1) Write it Down: Documenting the Process for Success
Like a professional football team needs a playbook to
succeed, dealerships must have a documented process for private-party vehicle
acquisitions. Writing down the steps allows for analysis and optimization,
ensuring efficiency and consistency. It provides clarity to team members,
fostering a standard set of practices. Moreover, documented processes enable
the dealership to attack and improve the process rather than target individual
2) Champion Success: Harnessing the Potential of a Dedicated
A department’s success or failure often depends on having a
dedicated champion responsible for its outcomes. Buying cars from private
sellers is more challenging than selling them, and having someone accountable
for the department's success is crucial. This champion takes ownership and can
be accountable when things don't go as planned. It ensures focus and
commitment, even when faced with more accessible alternatives within the
3) Engage in Conversations: Building Rapport and Understanding
Having meaningful conversations with private sellers is
vital to establish rapport and gain insight into their motivations for selling.
By picking up the phone and engaging with them, we can understand their
"why" and effectively communicate the dealership's value proposition.
A text message may have a different impact than a personal conversation. Dealerships
are known for making the car-selling process fast, safe, and easy, and by
having conversations, we can better connect with sellers.
4) Fair Market Offers: Building Trust and Community
In today's market, sellers have numerous choices regarding
receiving vehicle offers. Making fair market-based offers is essential to earn
their trust and demonstrate that the dealership values their time and car's
worth. By providing reasonable offers, dealerships can establish themselves as
a trusted source within the community. This connection with potential buyers
can extend beyond the sale and lead to future business opportunities.
5) Follow-Up: The Power of Continued Engagement
Follow-up is a critical factor in successful private-party
acquisitions. Research shows a high correlation between the number of
touchpoints and acquisition success. Engaging with sellers beyond the initial
stages increases the likelihood of acquiring their vehicles. While day one and
day two sellers may present challenges, engaging with sellers in subsequent
weeks can yield positive results. As time progresses, sellers may realize the
need for dealership support and appreciate the dealer's involvement, leading to
easier negotiations and potential repeat business.
Unlock the Full Potential of Street Purchases at Your Dealership
By adhering to the five process principles outlined above, dealerships
can unlock the full potential of street purchases. Writing down processes,
having a dedicated champion, engaging in meaningful conversations, making fair
market offers, and following up with sellers are all crucial elements for
success. As the landscape of private-party vehicle transactions continues to
evolve, dealerships must embrace this opportunity to play a more significant
role in the market. Together, let's redefine the car buying and selling
experience and drive the automotive industry into a new era of success.
Tom Gregg is the founder and CEO of the Vehicle Acquisition Network based in Chicago, Illinois. A true 'student of the industry,' Tom's automotive experience began as a porter and evolved through several management and directorial roles at dealerships in the Midwest. His entrepreneurial spirit soon outgrew his dealership journey, and he found himself focused on software development that, in turn, would be a benefit to dealerships across the country. A strong believer in mindfulness and wellness, Tom is an accomplished triathlete and has competed at the highest level of the sport in the Ironman Triathlon. Tom brings this quiet confidence and mentorship to his entire team at VAN, striving for a perfect balance of team culture, smart software development, and constant learning.