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Friday
Oct202006

Certified Pre Owned

Certified Pre Owned...Observations

Somebody said sarcastically that "Certified Pre Owned" is a $ 50.00 word for a "used car that somebody cleaned, and slapped a warranty on it". This might be a bit harsh!

Consumers have an inherent mistrust of "used cars" and it would seem that "certified pre owned" instills additional trust, and confidence. Is it what you call the vehicle...or who you are doing business with that you should trust...or both?

Identifying a vehicle with a $ 50.00 word should not make any difference, especially when everyone is now calling their used cars certified pre owned or a version of it. Everybody has a different inspection procedure with different parameters, and requirements. The same applies to the coverage of the warranty that is offered. The bottom line is that an inspected certified pre owned vehicle with an extended warranty is sold at an appreciable premium. You have to wonder where the value proposition is hiding.

Who you are doing business with...how much does that count? At the end of the day we are people, and we do business with people. We say that we are in the "people business through cars". Our emphasis is doing business, interfacing, interacting with you as a person with feelings, emotions, expectations.

As a consumer you do need assurances that you are getting an excellent used car. You also want to make sure that you are doing business with a dealer that not only understands, but truly cares about you.

In a market place where certified pre owned vehicles, at an appreciable price premium are commonplace.  May we suggest that you find, and do business with a dealer that inspires confidence, and that cares about you.

 

Saturday
Oct212006

Auctions

A Day at the Auction

You probably wonder what goes on at an auction, and that the prices must be very low.

This past week one of captive finance company for a German manufacturer had their monthly auction. We are advised ahead of time which vehicles will run on that particular date. We can check recent sold prices for comparable vehicles. We review the current market conditions for specific models.

Yes we do our due diligence, and also leave a room for being creative.

We arrive early, and inspect the vehicles that are of interest to us.  Although we know what to expect when we look at a lease return vehicle. We have our way of interpreting what we are seeing, have an understanding of how the vehicle was used, and how our customers would see it.

We want to buy X vehicles, and we usually focus on 2 to 3 times the number of vehicles.

The auction starts, and the fun begins, it takes 60 seconds to sell a vehicle on the block. Yes its that fast.

Its demanding to buy what meets our parameters, and at a price that makes sense for our market. The good vehicles everybody wants...need we say more. Interesting since even the ones with a "spotty" history there are dealers that buy those too.

When one of the vehicles that we want is coming up, we know what price we want to pay, and we have previously inspected this vehicle. The idea is to buy this vehicle at or close to the price we have in mind...there are easily 35 to 50 people on the floor bidding, and who knows how many online from across Canada. Yes, its very competitive.

Are we successful every time in buying a vehicle? No..that's the reason we focus on 2-3 of the model that is of interest to us, to get 1. We are very particular in the vehicles that we buy.

We usually succeed in buying what we are looking for, at a price that we feel makes sense for our customers.

 

Monday
Oct232006

Auctions

The Human Reality

Even if technology facilitates many aspects of auctions. Bidding is still a great human experience, an emotional shredder, and a compelling reality moment.

There is an entire gamut of human emotions that come into play at every auction. There are numerous bidders competing with each other for specific vehicles. Imagine 30 dealers bidding on 1 vehicle, what transpires in the space of 60 seconds, between the bidders, the ring men, the auctioneer is palpable. Then it start over again for the next vehicle. 

Everyone outwardly tries to come across as cool, and relaxed, the body language which is the primary communication at an auction tells a different story. One is pumping up his ego, the other just got "owned", another has his 5 seconds of fame in winning a vehicle, and another walks out for a break.

 A few common denominators, all present are ingesting an appreciable amount of exhaust fumes, enduring the "auction white noise", unable to carry a conversation, and observing the body language.

There are moments of brilliance, and moments of "not too smart".

The best deals are when the bidder is bidding against the seller, and not another bidder....these instances are quite rare though.

The floor bidder thinks he won a vehicle, and the online bidders (these bidders are usually from out of town) jump in to outbid the floor bidder...it gets interesting.

These are "wholesale auctions" for dealers, they are fast paced, within an environment of "you snooze you lose". Its one of the reason the emotions get pumped up, amplified, and shredded.

Auctions that are opened to the public call them "retail auctions" are much slower paced, the emphasis is to give everyone time to think about it. The level of bidder competition is limited compared to wholesale auctions. 

These auctions last 4 hours, and everyone is a little worn at the end, its that demanding. Its also an interesting mental challenge to show up with a purchase agenda, and hopefully conclude the auction with the agenda fulfilled.

 

Tuesday
Oct242006

Auctions

Now that we bought a vehicle...

Good question: these vehicles are detailed, and front line ready. Its easy, and tempting to immediately advertise the vehicle at a price to generate a profit.

What do we do at Strada...

We pick up the vehicles ourselves, we drive them to our location. This immediately gives us a concise idea of how this vehicle drives. By the time we reach our location  have checked most of the features, and know of deficiencies which require attention.

At our location we inspect the entire vehicle, in our inspection process we are constantly putting ourselves in the customer's shoes.

We drive the vehicle again to verify if we missed any items, we then have a comprehensive mechanical inspection performed on the vehicle.

We recondition all our vehicles, for us its not spending, but investing in our vehicles. Needless to tell you that reconditioning is a costly process, and undertaking.

We nurture the vehicles that we buy, we like them, we recondition them, and add value to the vehicle. To enhance the ownership experience of the customer.

 

Wednesday
Oct252006

Reconditioning

The Strada Philosophy

If a vehicle is 3 years old with 50,000 to 70,000 klms, its almost new, its easy to do hardly any reconditioning. Even on Certified Pre Owned programs these vehicles easily pass the inspection check list.

We are fastidious from the outset, and pay additional money to get a better vehicle, is so doing  we already have a good starting point, and base.

When it comes to reconditioning there are 2 distinct schools of thought. Do you save money in reconditioning? Do you add value in reconditioning?

At Strada our reconditioning philosophy is to add value to the vehicle, and be sure that the customer does not have any hassles. By functioning on a philosophy of adding value, we inherently recondition, and spend more than we should on a vehicle.

To be blunt, we know how to save money, but we don't do that, since it would really upset us if someone did that to us...its a big issue with us. Here is a simple example - front brake pads are acceptable they will safety the vehicle, however they are on the low side of acceptable. Simple question - is this what we would expect? No, if they are low we would expect new brakes pads. New pads it is.