AutoNation is using its service business to find used cars to sell.
When a vehicle comes in for service or repair at any of AutoNation's 246 dealerships, service employees check to see if it's on a list of desired models. If so, they hang a colorful tag on the rearview mirror offering the owner "up to 120 percent of the current book value."
The offer doesn't require the purchase of a new or used car from AutoNation.
Like most of the country's dealers, AutoNation is beefing up its used-car inventory in preparation for a constrained supply of new Japanese vehicles because of the March 11 earthquake and tsunami in Japan. But it doesn't want to pay the high prices that used vehicles are getting at auction, said COO Mike Maroone.
"We saw we have another source of business -- the approximately 14,000 vehicles we service every day. We want to communicate to those owners that we are aggressive buyers of inventory. We want the cars that are in high demand."
The Winning Trades at the Door tag program was rolled out at AutoNation's Florida stores in mid-May and then to its dealerships in 14 other states. The program supplements used cars that AutoNation takes in as trades from new-vehicle buyers.
Maroone said AutoNation also is using direct mail and e-mail to solicit people who brought their used cars in for appraisal but decided against selling or trading.
To set prices and determine what vehicles AutoNation wants, the company uses software licensed from the American Auto Exchange. It tracks what vehicles are selling at auction and what used vehicles AutoNation has previously sold and gives a market value for specific models.
"We have a buy list for every store and a profile of what that that particular store has retailed successfully in the past," said Maroone.
In general, the most desired used cars have less than 50,000 miles, are three to four years old and are fuel-efficient. Maroone said most of the used cars will be sold as certified used vehicles. AutoNation sells an average of 550 used cars a day and has an average monthly inventory of 20,000 used vehicles.
Another advantage to buying a service customer's vehicle is that AutoNation will have the vehicle's service history. Maroone said, "It is generally the same brand car you are selling in the store so we can recondition them cost-efficiently."