Archive for November, 2011

This is probably the most important news of the year for car dealerships getting ready for December 2011. We are going to hit on not just this spike in used car values and how car dealers can take advantage of this temporary window of opportunity but how dealers can take advantage of it affordability.

We could quote hundreds of media outlets but just USA Today, New York Times, or the Wall Street Journal will keep you busy for days with article after article about this spike in used car values!

For example, just within the last few weeks, Jonathan Banks, senior analyst with the National Automobile Dealers Association said “Trade-in values on many 3- to 5-year-old small cars, such as the Chevrolet Cobalt, Honda Civic and Toyota Corolla are about 10 percent higher in September than a year ago”. Those makes are just examples and there are other makes, models that are much more than 10 percent!

Another report said that the price of the average  three-year-old used vehicle was rising 15.8 percent per year. In 2008, the average cost of a three-year-old vehicle was $15,042, but now the average is $23,353, according to the report.

Banks also said that “Higher trade-in values will help facilitate new vehicle purchases because car owners have equity built into the deal, which they can use as a down payment”. Let me say that again. “Higher trade-in values will help facilitate new vehicle purchases because car owners have equity built into the deal, which they can use as a down payment!

Let me point out here that I am not putting emphasize on that assessment because this audience needs to understand it, we know car dealerships know this, but what’s important for you to understand is that this is public information, available to anyone researching a new car purchase.  You know, this new more “educated car buyer”?  The car buyer that goes to 50 websites and learns everything possible, reads every article, goes to social websites, manufacture websites,,, reads all the reviews and on and on and on?

This information could be used in marketing as well, would you agree?

Banks went on to say “Higher used car prices will also drive more car shoppers to choose new vehicles instead of used ones because monthly payments between a new and used purchase will be closer. Used car prices at the end of the year will still be higher than last year”.

So what does that mean? It means if you’re a dealership and you’re not taking advantage of this sweet sweet gift that current market conditions has given you, you’re crazy nuts! (J/K)

Speaking of nuts, let’s talk nuts and bolts for a second.  I mentioned earlier that we would go over how dealers can take advantage of all this, “affordability”.

First, it’s important that you understand the difference between a direct mail marketing “event”, and a direct mail marketing “lead generator”.

There is a HUGE difference and if you have this down, you can save thousands of dollars on your next direct marketing decision.

First, the direct mail marketing event.  Most dealerships know what that is. You run a direct mail event, get 100 ups, sell 35 cars!  You run the event over a 3-day period like Thursday, Friday, and Saturday. You crank up the hot dog cooker, popcorn, soda pop, and really make an event out of it.   So that’s the common direct mail event.

However, there is another road and it’s the “lead generator”. It is much more affordable and after all is said and done, it is just as effective or maybe even a wee bit better.

We don’t invite everyone in on a certain date at a certain time and have all the hoopla. The piece just has the message and usually a telephone number and/or a PURL (Personal Uniform Resource Locator) that drives the customer to the phone, the internet, or even “walk in” but the main objective is to set an appointment with the customer, and then have a plan basically in place to give the customer the attention they deserve when they show up for that appointment.  Now, why is this route so much more affordable?

A couple reasons:

1)  You don’t need to pay a bunch for postage to make sure everyone gets the message at a specific time frame because the event is not time sensitive.

2)  Since customers are coming in with staggered time stamps for the appointment, you don’t have all the other cost involved to elevate the dealership appearance ( food, sodas, extra personnel, etc. etc.).

So we talked earlier about these 3-5 year old cars. Would you agree that your dealership should be touching every 3-5 year old vehicle owner in your market area at least once a month, making sure these owners know about the current market conditions and how it affects them?

Now the big question, how do you reach out to these 3-5 year old car owners? Radio?  TV?  Newspaper? Twitter? Facebook?  Of course not.

You know that the best way to communicate with these 3-5 year old car owners is to put that message directly in their hand via the mailbox.  No wasted advertising, no mass media, just one targeted message, to the right customers, with the right criteria, right demographics, at the right time.

Where do you get this information?  You can get some of them from your own data base. But the best source  is at Buy Mail Direct.

Why the “best source”? You have to be very careful. Those of us that have been in this business a while, remember the summer of 2000 very well. Senator Shelby attached a provision to the transportation bill that seriously changed how states put the Drivers Privacy Protection Act into practice. That act, passed several years ago, required states to provide notice and opt-out procedures before a state could make its driver’s license and motor vehicle license lists available to us evil direct marketers. The Shelby amendment turned the act on its head and required that states offer notice and opt-in before making the lists available. It was wild to say the least.

Anyway,BMD’s National owner file (the Definite List) has about 140 million registered vehicle owners that we can pull info by Make, Model, Year, VIN (which as you know, when you have the Vin #, you have all the info you need and then some). Our list is built from self-reported data, auto service departments, Lube Oil filter shops, credit bureaus, as well as many other sources.

Plus, once we pull the data such as year, make, model, we can then append each vehicle with either KBB or Black Book values, your choice, either one, no problem!

When cleaning up the data is required and we have a situation where some data is not complete or is confusing, we don’t try to fix it up, we throw it out.  BMD’s Definite list is about 95-98 percent accurate.

So once you have the most updated list of automotive owners available for your market, you are ready for the message. The message does not need to be complicated but it should have the right mixture of solid information pertaining to the purchase of a vehicle, along with some urgency to take advantage of this opportunity before it ticks away.

Just to summarize, there is a serious spike in values out there with certain used vehicles and even though it won’t last, it is alive and well right now.  Every 3-5 year old vehicle owner in your market needs to know that even if they have not thought about buying a new (or newer) car right now, they may want to consider selling their car because they basically have “temporary equity”.

This is a very important time of the year for the car business. People have been putting off buying a new car for a long time and this is the time of the year that people usually have a little more disposable income (be it by some type of bonus or year-end savings plan, or something else), but buying a new car before year end can be beneficial for small business or just flat trading in an old car that is set to turn one more calendar year older!