Stop Chasing One-Time Sales – How Top Dealers Are Building Repeat Revenue Machines | Paul Nadjarian, Chief Product Officer at Carfax
About this episode
Paul Najarian, Chief Product Officer at Carfax, discusses how dealers can shift from one-time sales to building long-term customer loyalty using vehicle history data and intelligent automation. He highlights Carfax's evolution from providing reports to creating a trusted used car marketplace and a car care app with over 50 million users. Paul introduces the concept of 'homegrown' cars—vehicles sold and serviced by the same dealer—which tend to sell faster and at higher margins. The episode emphasizes the importance of retention, service lane visits, and leveraging data-driven tools like Carfax Lifetime and Carfax CarCare to increase repeat business and profitability.
Carfax
"Today I'm joined by Paul Najarian, Chief Product Officer at Carfax."
Carfax is a company that tells you the history of a used car, like if it had any accidents or how many people owned it before.
Carfax is a company that provides vehicle history reports to consumers and dealers, helping them understand a used car's past including accidents, ownership, and service records.
OEM
"all the OEMs have already re-forecasted it down"
OEM means the company that originally makes the cars or parts you buy, like Ford or Toyota.
OEM stands for Original Equipment Manufacturer, referring to the companies that produce vehicles or vehicle parts that are sold under the brand of the car manufacturer.
new car margins
"that thinks new car margins are going to miraculously expand suddenly."
New car margins are the amount of money a dealer earns when they sell a brand-new car.
New car margins refer to the profit dealers make from selling new vehicles, which can be affected by manufacturer pricing, incentives, and dealer markups.
dealer retention
"which all brings us back to retention, how that's increasingly the most important thing for a dealer."
Dealer retention means how well a car dealer can keep customers coming back to buy or service their cars.
Dealer retention refers to the ability of car dealerships to keep customers coming back for service, repairs, or future vehicle purchases, which is crucial for their long-term profitability.
gross profit per vehicle
"But he basically said, Yossi, we don't look at just gross profit per vehicle. We look at, and again, this is not the exact word to use,"
This means how much money a car dealer makes from selling a car before adding other things like trade-ins or fees.
Gross profit per vehicle refers to the basic profit a dealer makes on selling a car before accounting for additional costs or revenues from related transactions.
fully loaded profit per vehicle
"We basically look at fully loaded profit per vehicle. Oh, he called it super PVR."
This means how much money a dealer really makes from selling a car, including extras like trading in your old car or selling you extra services.
Fully loaded profit per vehicle is a comprehensive measure of profit that includes all sources of income related to a car sale, such as trade-ins, financing, add-ons, and extended warranties.
super PVR
"Oh, he called it super PVR. And I said that makes a lot of sense"
It's a fancy way dealers say how much money they make from selling a car, including everything extra like trade-ins or warranties.
Super PVR is a term used by some dealers to describe the fully loaded profit per vehicle, capturing all profit sources from a car sale.
trade-in
"Now, when that consumer is ready, they wanna take that car in on trade, right? And sell them another car."
When you want to buy a new car, you can give your old car to the dealer instead of selling it yourself. The dealer then lowers the price of the new car by how much your old car is worth.
A trade-in is when a customer offers their current vehicle to a dealership as part of the payment towards purchasing another car. The dealership appraises the trade-in vehicle and applies its value to the new purchase.
homegrown car
"we're calling a homegrown car. And that's gonna show up on the Carfax report very soon"
A homegrown car is a car that has been bought and looked after mostly by the same dealer, which usually means it's been taken care of well.
A 'homegrown car' refers to a vehicle that has been sold and serviced primarily by the same dealership, indicating consistent maintenance and potentially better care history.
homegrown inventory
""what percent of a dealer's used car inventory is actually homegrown? That's a good question for a dealer.""
Homegrown inventory means used cars that the dealer got from people trading in or selling nearby, not from big auctions. These cars might be easier to trust because the dealer knows where they came from.
Homegrown inventory refers to used cars that a dealership acquires through trade-ins or local purchases rather than sourcing from auctions or other dealers. It often indicates vehicles that have been maintained or inspected by the dealership itself.
service history
"but you service that car for at least 75% of the service history of that car."
Service history is like a report card for a car that shows all the times it was checked or fixed. It helps buyers know if the car was taken care of.
Service history refers to the documented record of maintenance and repairs performed on a vehicle over its lifetime. It helps verify that the car has been properly maintained, which can affect its reliability and resale value.
new car customer
"because you're a new car customer to begin with."
A new car customer is a person who buys brand new cars from a dealer instead of used ones.
A new car customer is someone who primarily buys new vehicles from a dealership rather than used cars. Dealerships often prioritize retaining these customers for repeat sales and service.
used car lot
"Well, because once you see how these cars sell on your used car lot, because they sell typically at a higher margin"
A used car lot is a place where people sell cars that have been owned before. Dealers buy and sell these cars to make money.
A used car lot is a dealership or location where pre-owned vehicles are sold. Inventory turnover and profit margins on these lots are important for dealer profitability.
co-branded
"which is the co-branded version of Carfax CarCare that a dealer can offer a consumer, when they buy a new car and they're using Carfax CarCare to come in for service, because it's helping them maintain their car, remind them when they need to come in, Carfax is sending that out co-branded with the dealer."
Co-branded means two companies work together and put their names on the same product or service to help customers.
Co-branded refers to a product or service that is jointly branded by two companies, in this case, Carfax and a car dealer, to provide a combined offering to customers.
AI-powered inventory strategist
"That's Lot GPT. It's the industry's first AI-powered inventory strategist built specifically for car dealers."
It's a smart computer program that helps car dealers figure out which cars to sell and when, by looking at lots of information about the cars and buyers.
An AI-powered inventory strategist uses artificial intelligence to analyze car dealership inventory, pricing, market trends, and shopper behavior to optimize sales and inventory management.
VIN
"VIN by VIN, no digging through reports, no guesswork."
A VIN is like a car's fingerprint, a special number that tells you everything about that specific car. It helps people know where the car came from and if it has any problems.
VIN stands for Vehicle Identification Number, a unique code assigned to every motor vehicle for identification purposes. It helps track the vehicle's history, specifications, and ownership.
CDP
"I think the other thing that dealers are doing today is dealers are building a CDP where they understand the behavior of consumers."
A CDP is a tool that helps car dealers keep track of what customers like and do, so they can send better messages and offers.
CDP stands for Customer Data Platform, a system used by dealers to collect and analyze customer information to better understand consumer behavior and improve marketing efforts.
service lane
"...a lot of those cars are gonna end up coming through your service lane. You know, I do wonder if the..."
A service lane is the place at a car dealer where cars get fixed or checked to make sure they work well. It's like a car doctor's office.
The service lane at a dealership is the area where vehicles are brought in for maintenance, repairs, and inspections. It's often where used cars are inspected and serviced before being sold or returned to customers.
dealer premium
"...every dealer under the sun puts some premium on vehicles that, they know the history of them, they have experience with them."
A dealer premium means the car seller might charge more money for a car if they know it well or think it's special. It's like paying extra for something you trust.
A dealer premium is an additional amount a car dealer charges for a vehicle based on factors like known history, condition, or demand. Dealers may price cars higher if they have experience with the vehicle or know its background well.
Toyota Corolla
"you know, Toyota Corollas are available in my area to buy."
The Toyota Corolla is a small car that many people buy because it is reliable and doesn't use much gas. It's a good choice if you want a car that is easy to take care of.
The Toyota Corolla is a popular compact car known for its reliability, fuel efficiency, and affordability. It has been one of the best-selling cars worldwide for decades.
dealer inventory
"If the dealer's listed with us, his listings are already included."
Dealer inventory means the cars a car dealer has to sell right now. You can look at these cars online to see what's available.
Dealer inventory refers to the cars that a dealership currently has available for sale. This inventory can be exposed online to potential buyers through various platforms.
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