Reed-Lallier Chevrolet launched the unique certification program in March, offering a new category of used vehicle -and increased turn rate, sales, service and customer satisfaction thanks to the expansion of certified used vehicles
Ever since Cory Lallier’s family opened its first dealership in 1988, the Lallier name has stood for fair deals, straight talk, and excellence in customer service. In fact, many people in Fayetteville, North Carolina, consider Reed-Lallier to be an institution –a family-owned store that has proved its commitment to the local community and its citizens.
Even so, Reed-Lallier found themselves in the same situation most dealerships face today: The new car “race to the bottom” sales trap. But, this is not new. The reality is that every parking space is a financial commitment, and the faster sales can turn inventory, the faster a dealership can buy more cars and drive profit through other areas of the store, like F&I, service, and more. What is new is the added dimension of an overheated and competitive used vehicle sales market –especially when it comes to certified pre-owned (CPO).
Today, new vehicle sales are falling, while used car sales are on the rise because new cars are too expensive, and many more affordable used vehicles are coming off lease. Increases in pricing and more quality used inventory combined with new disruptors like Carvana, makes for a tough dealer market – but an excellent CPO opportunity.
The Challenge: Adapt to the Opportunity of a New Market
General Manager, Cory Lallier, saw the trend and knew the dealership had to adapt, find an opportunity to meet the needs of car buyers, and create faster turns –with higher profit margins –for his sales team. “We have a 1:1 new to used ratio,” says Lallier. “This is important, because the new vehicle market has become so competitive that it seems like a race to the bottom, but we have more control on the pricing of used vehicles, plus, because customers bring those vehicles back for service, it helps keep the service department running, the body shop running, the finance department –used vehicles touch all aspects of the dealership.”
Even with their excellent ratio, Lallier felt frustrated by the gulf between vehicles sold “As Is” and the highly coveted and restricted OEM CPO vehicles, which represented about 20% of his used car sales. Perfectly respectable vehicles that were either not his dealership’s brand or had mileage and age outside the OEM CPO strictures were relegated to ‘As Is’ purgatory.
Lallier knew there was a lost revenue opportunity with those vehicles –but how could he take advantage?
The Solution: A New Category of Used Car
When SureSale Certified knocked at his door, the timing was perfect. “We were looking for something that gave the customer a little bit extra peace of mind and helped the salespeople overcome objections out on the lot,” says Lallier.
Working with SureSale Certified, Lallier developed a new category of certified used vehicles –similar to an OEM Certified program but for vehicles up to 15 years old and with 150,000 miles –as well as for off-brand vehicles. Each “SureSale” vehicle came with a CAReport, clean title, 150-point plus inspection, 5-month / 5,000-mile warranty, and a 5-day exchange guarantee. “Before SureSale, we were only able to certify Chevy, GMC vehicles. Now we’re able to put it on pretty much any auto brand, and you can overcome the sales objections,” said Lallier.
The SureSale team also supported the dealership with marketing that helped Reed-Lallier create a unique selling proposition –and get out to the market first.
The Result: Expanded Marketability of Used Vehicles = Incremental Sales
Within a week, Reed-Lallier was up and running on the program, with a new section of the dealership used lot branded with SureSale Certified merchandising.
By the end of March, just one month later, used vehicle sales at the dealership had increased by 62.3% Year-Over-Year for the month, significantly higher than the YOY average for the top 25 dealerships in that DMA and far greater than the overall used vehicle market in that area which was down -2%.
The SureSale vehicles for that period also had a faster turn rate 10% higher than non-SureSale vehicles.
Says Lallier, SureSale vehicle sales were incremental: “Year-to-date our used vehicle sales are up significantly and the only thing that has changed in our used vehicle department is SureSale.”
The reason begins with the turn and includes that most vital of consumer needs: peace of mind. “Our SureSale vehicles are much faster moving because consumers have peace of mind from the inspection checklist, the vehicle history, the merchandising, the exchange program –if they take it home and within 5 days they hate their decision, they can bring it back in and exchange it for a different vehicle.”
Reed-Lallier makes sure that their technician manually checks the boxes for the 150-point checklist versus using a computer so that the consumer gets the authenticity of a handwritten inspection. That way the salesperson “can go through it line by line with the consumer and reiterate the whole SureSale experience.”
SureSale Certified increases used vehicle sales because the sales team enjoys selling it. “Their goal is to sell as many cars as possible. SureSale streamlines the process for the salesperson because the consumer is confident and comfortable with what they’re buying out on the lot. “
The salespeople want that added protection too –they don’t want to sell a bad car and they don’t want to have an upset customer because they don’t have a way to fix the vehicle. They know with SureSale they do.”
And even this early as a SureSale Certified dealer, Lallier can already see indications of additional gross: “the good news is that even with the SureSale fee, we haven’t had to go backwards on front-end gross, so that’s a good sign of additional gross because of the additional value.”
Since becoming a SureSale Certified Dealership, Reed-Lallier Used Vehicle Sales have soared.
Reed-Lallier used vehicle sales were two and a half times greater than the average for the local market YOY for the period following implementation of SureSale*:
- Reed-Lallier Used Vehicle Sales increased 30% YOY for March to May versus the Raleigh Used Dealer Market average which was only up 8% for the same period.
- Reed Lallier sold 259 units March through May vs 199 units for the same period in 2018.
- Of the units sold, SureSale vehicles represented nearly 50% of those vehicles: 124 of the 259 units.
How It Works
What is SureSale Certified? It is a turnkey program that enables dealers to:
• Extend their certified marketing program to vehicles they could not previously certify, including vehicles up to 15 model years old and up to 150K miles.
• Includes reconditioning requirements that focus on mechanical and safety and not appearance and cosmetics.
• Directly marketed direct to consumers, and drives buyers into the dealership.
SureSale-branded vehicles come with:
• Extensive background check and clean VIN requirement.
• Free Comprehensive Auto Report (CAReport) for every vehicle.
• 150+ Point Inspection that’s similar to OEM Certified except no appearance related reconditioning required (e.g., one key, no matching rubber, etc.).
• 5-Month, 5,000-mile Limited Warranty.
• Comprehensive Limited Warranty which includes all drivetrain plus seals and gaskets plus AC and electrical plus roadside, towing and rental.
• 5-Day, 500-Mile Exchange Guarantee.
• Reinforces peace of mind for your buyers, rarely used but strong consumer marketing value proposition.
• Extended Protection Plans.
• Plans of 12, 24, and 36 months offered on all SureSale Certified vehicles.
Download the full case study here