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Car Loans

More, Longer Car Loans are Becoming the Norm

There is good news and bad news when it comes to car loans. Most people like the good news first, so here it is: Americans are borrowing money for vehicles like never before. In fact, new loans for cars and light trucks (both new and pre-owned) just surpassed $1 trillion for the first time. […]

Customer Complaint

Turn a Customer Complaint into a Positive

There are times when every auto dealer must address a customer complaint. It is of utmost importance that you do not dismiss this customer as a troublemaker. While there is a small portion of the general public you’re not going to please no matter what you do for them, most people just want to believe […]

Service Department

The New Automotive Service Department

In today’s automotive marketplace, dealerships are placing extra emphasis on the service department, looking for ways to improve their overall bottom line. Some are extending their business hours during the week and on weekends. Many have taken on the “we repair all makes, all models” mentality. Another popular train of thought is to hire additional […]

Orlando Business Journal

Orlando Business Journal Names JKR Top Ad Agency

JKR Advertising & Marketing is #1, according to the Orlando Business Journal. The leading business newspaper in Orlando has revealed its 2015 “Top Advertising and Digital Marketing Agencies” and JKR tops the list. “We had an outstanding year, mirroring the victories of our clients,” said CEO Jeff Johnson. “Our clients are having great success […]

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Post-Pandemic Dealer Gross Profits are Down – But They Don’t Have to Stay There!
March 13, 2024

It is no secret that dealer gross profits per vehicle are down sharply in the post-COVID automotive world. According to a recent article in Automotive News, gross profits of the six largest publicly traded dealership groups plunged significantly from Q4 2022 to Q4 2023. One of them was actually down 35% per vehicle!

The article explains: High interest rates, more expensive vehicles and a steadier post-pandemic supply chain continue to soften demand and bring it closer to pre-pandemic levels. Still, new-car buying has remained strong overall …

This means that, while sales volume is similar, overall bottom lines are lower for many dealers due to the reduced gross profits. What about your dealership?

Being Realistic
It’s time to turn the page! The time for dealers to simply be order takers for people willing to pay MSRP for a vehicle (and in some cases more) has passed and dealers have to work hard once again to achieve acceptable gross profits.

Selling a high volume of cars doesn’t control gross profits, no matter how much you wish this was the case. Correct processes and menu pricing – and strict adherence to them – do!

What kind of processes?
∙ Slow down the transaction! Your sales staff has to once again sell the customer on the features and benefits of every new and pre-owned vehicle on your lot.

∙ Your salespeople and managers should devalue the customers’ trade-in value (politely, of course) as much as possible. After all, if the customer expects you to lower your price, shouldn’t you be able to do the same on their trade? Remember, you’ll have to fix it up, put your name on it and resell it to someone else with all the tenacity you would a brand-new car. So make sure you buy it right … because the profit is made when you buy it, not when you sell it!

∙ To that end, management should be ready and willing to leave the desk and do thorough walk-arounds on each trade to ensure the best outcome for the dealership.

The Cure for Low Gross Profits
If you are like a lot of dealers these days, you could use some good news. Here it is: while you may not have the capability to achieve profit margins similar to those you enjoyed during the pandemic, they could likely be improved. JKR’s clients enjoy the benefit of attracting not only more customers, but better ones, too!

If meeting and exceeding your sales goals (and increasing gross profits at the same time) sounds great to you, you need to call us. Don’t settle for reduced gross profits when help is out there to get you closer to where you’d like to be.

Want to know how we do it? Reach out to Senior Partner Richard Brauns (407) 701-4233 or Partner/Vice President Jon Albert (407) 718-2494 today.

JKR Automotive Advertising: We Move Cars.

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