NIADA Panel Veteran Dealers Use Creativity, Experience to Succeed

By Jeffrey Bellant

LAS VEGAS – A panel of dealers representing more than 125 years in the independent business discussed how to overcome the challenges of the current market during the National Independent Automobile Dealers Association convention and expo here last month.

Moderator Brady Thurgood, CEO of Carketa, kicked off the conversation by asking about the challenges of high prices of inventory, even as it has softened a bit.

Jason Berry, co-founder of Carketa and owner of Action Auto, in Saratoga Springs, Utah, said as wholesale prices slid a bit at the end of the year, there was a bit of a panic.

But what Berry’s dealership has focused on is consistency in repricing.

“One thing that’s super important is to really take a look at live market data, days to turn,” he said. “Stay super-conscious on what the industry is doing and how it is trending.”

Berry actually cut $800,000 out of his cars on a single Sunday and repositioned into new inventory in December.

Every seven days the dealership does price checks of all 600 cars in inventory.

“We reprice, keeping the prices moving, whether we go down or up,” Berry said.

It shakes out customers who may see a car go up and then call to ask if he can get it at the lower price.

“So, price movement is important and then stay sharp on average time to turn a car,” he said.

James Santistevan, owner of ZIA Automotive in Albuquerque, N.M., started in the franchise business 46 years ago and opened his independent dealership in 1990. Since then, he’s sold more than 24,000 vehicles.

Like Berry, his dealership made “heavy adjustments” in 2022 as interest rates started to tick up.

That meant higher payments for Santistevan’s customers and also for his floorplan. Keeping prices low and moving inventory quicker works for him.

“It’s generated definitely more income on the back end,” Santistevan said. “It excites our staff which includes the management, because they’re busy all day.

Lou Tedeschi, president of ASPI Motor Cars in Dedham, Mass., is a 43-year veteran of the industry and an NIADA past president.

But he’s a smaller dealer, so it’s a different situation.

“We try to keep the overhead as low as we can,” he said.

He adds a little more investment in the recon side to make the vehicles stand out. Tedeschi is chairman of the NIADA CPO360 program and he uses that program to compete with some of the franchise dealers.

Michael Darrow, president of The Auto Finders in Durham, N.C., is president-elect of NIADA and looks at a couple of things to reduce expenses and improve turn.

“One of the key metrics we look at is days to buy,” Darrow said. “That’s from the point you buy that car at auction to getting it through service, lot ready and getting it on the website.”

It becomes costly when a car takes 10 to 14 days to get from auction to ready to sale. Also days on the lot needs to stay low, and like Berry, Darrow has adjusted pricing.

Inventory is another issue dealers struggle with.

Darrow does something different: he sells cars on consignment.

“We’ll get the car in, market it, detail it, service it and sell it,” Darrow said. “We’re averaging about $1,000 a copy on those consignments. Last year we did 126, this year we’re on pace to do 150.”

These are situations where a parent is going into assisted living and they don’t need the car or a church calls because someone has passed and they need help selling a car.

Since selling cars privately can be dangerous, Darrow plays up that aspect of the service.

“The front end gross is not tremendous,” he said. “But on the back side, if we can sell a GAP policy or an extended warranty, we can make a pretty nice deal come together.”

Tedeschi also gets creative when it comes to inventory.

“I’m a service guy, started in the service business,” Tedeschi said.

“For years, I do a lot of accessorizing to dress up inventories, changing interiors, that type of thing. We’ll get some edge vehicles and fix them up.

“We’re also buying a lot more off the street.”

Berry said the cars are there, but the key is to try and look outside your local market.

“For example, a Subaru Outback in Utah is going to sell for more than in Los Angeles,” Berry said.

Look for areas with dense inventory, like New Jersey or Southern California. Teslas in Southern California are more plentiful than in Utah.

For inventory, Santistevan likes to buy a lot of duplicate vehicles, one with a little bit higher mileage, one with lower mileage.

“So, any consumer comes in, they have their options,” he said.

He also goes out of his market to get inventory, some of which is more specialty European stuff.

Santistevan also has a strategy when buying basic program cars.

“We’ll change it up,” he said. “Maybe paint the wheels black, something to make it look a little different.

Finding ways to cut costs can also help the dealership.

Berry is writing down every single vendor he uses and how much he spends with them.

“Start with just writing it down and list out how much you’re spending with each one of them” he said. “Right now is the time to renegotiate. Renegotiate everything.”