JZ Motors

Used car dealer in Melbourne

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PH: 03 9752 2799
FAX: 03 9752 2965
jzmotors@bigpond.net.au

LMCT 8365
1100 Burwood Highway Ferntree Gully 3156 Victoria

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Amidst Internet, A Positive Outlook for Used-Car Market

March 19, 2015 by Editor

While dealers of brand new cars recently report bleaker profits, things have all been good for the used-car market. Thanks to the Internet. Anyone interested to purchase, say, a Toyota SUV can easily compare prices and get to know the breakdown of the vehicle’s cost online.

Such transparency, driven by the Internet, has been known to undermine the big players’ profits because private sellers can easily match prices and even market products that offer the same quality, minus the much heftier price tag set by the competition.

The same internet-driven transparency issues have been observed among car dealers — both in the new-car and used-car departments. But why do sellers of second hand vehicles see more profits while those offering flashy brand new ones languish?

It’s All About Smarter Dealership And Operations.

Higher Profits Despite Reduced Spread

NADA Used Car Guide analyst Larry Dixon said that since 2008, the difference between the wholesale prices paid by dealers and at auction and the retail price they offer has diminished by about $1000, bringing down the spread to just about $4,000. But does a narrowed spread necessarily mean lower profits?

Not necessarily

In fact, before the 2007-2008 recession started, gross profitability from used cars increased to about 13 percent, about two percent higher that it was before the recession. That the profits are up and the used-car market is doing good means that dealers are simply getting smarter.

To curb the growing threat of narrowed spread, used-vehicle dealers had to be more efficient in handling inventory and vehicle pricing. For example, selling the used car to buyers at prices close to what other dealers offer will leave little room for bigger discounts. This ensures greater profits, which otherwise could not have been achieved if buyers were allowed to haggle for more deals.

This move makes sense, now that price transparency, as a result of free information on the Internet, will show buyers the average price of a certain used car for sale. For example, a customer who buys a second-hand Toyota SUV may do so but could no longer demand for bigger discounts because he or she knows the average pricing online. Such smart strategy among dealers may seem very limiting, now that they can’t demand for higher price tags, but overall sales performance has been generally positive to date.

Another strategy to maximize profits making sure the second-hand car is sold within the first 20 days of purchase. Also, spending so much time for reconditioning repairs does not guarantee bigger sales. So, the pressure is on for dealers to keep the prices of used vehicles close to the market price, and at the same time market these cars to hasten the turnover period — from the time the vehicle is bought for resale until day it is finally sold to the new owner.

With these smart techniques in purchasing, handling and reselling used cars, Internet transparency can be a surprising ally, not a threat as many businesses perceive.

Filed Under: News Tagged With: Internet Price, Price Transparency, used cars, Used-Car Market

JZ Motors

RAJ from Tarneit

He has just purchased his dream car and is over the moon about it.

This is the only second hand car yard I can trust for quality cars and service.. thank you JZ (Jeffrey) I love my new car!! Oh recommend by racv and many other ppl who have bought a car from JZ MOTERS..read more
Alan Edwards
Alan Edwards
23:43 08 Jun 19
Being nineteen (and partner 21) at the time, and buying a car from a dealer, I thought we would be up against folk who treated us with little respect. This was absolutely not the case here! The first car we looked at on our hunt was the one we ended up buying. We've had it close to a year now, and put an additional 70,000km on it, completely trouble free. Thanks guys.read more
Quin Moore
Quin Moore
22:53 04 Jun 19
Was a little nervous about buying a used vehicle but these guys really made me feel welcome. Sold me a great car at a great price with some generous extras (warranty, RACV cover etc) and gave me a very reasonable price for my old one. Car had a little issue that needed fixing (it happens with second hands) but they were very nice and apologetic about it. Had the issue resolved promptly, no-questions-asked and now it runs wonderfully. Really exemplary after-sales service. Would go there again.read more
James Keen
James Keen
05:27 22 May 19
Bought a navara st-x d40 from these guys. Had some issues, but they help me out and I'm happy. I was probably a bit rude when the problems propped up, but they did the right thing and helped me get it all sorted. My nav now has a new clutch, and drives awesome. I appreciate AJ and Scott over at cool core radiators for doing such a great job. Also a special thanks to Paul at JZ motors for being a great guy and professional, even after I sent some rude messages. Thanks guys, I appreciate all the support.read more
David Lyster
David Lyster
08:32 18 Mar 19
Last Friday I turned up at JZ Motors. I was greeted straight away by Paul. I told him what I was looking for, he pointed me directly to what I had in mind. Details of the vehicles were explained in real person terms, so I understood he said. I test drove 3 Toyota’s and ended up choosing a Camry. Whilst we were in the I met with Jeff, the owner and the deal was done. I’m extremely happy with my new car and very impressed with the way I was treated. I would recommend JZ Motors to anyone. Thanks again Sandra F (a very happy customer)read more
kate Reggio
kate Reggio
06:17 24 Aug 18
If you want a typical cars salesman that will say anything to close the deal, then please keep walking. But if you can handle a dose of straight shooting, down to earth guys, then you might get a good laugh and a damn good car too. Well worth the extra drive to get there.read more
Saint rose
Saint rose
14:34 17 Sep 17
Really helpful & freindly! Very happy with our purchase. Paul was great to deal with! Definitely recomend them!
sandi laird
sandi laird
11:16 23 Jul 17
JZ Motors provided me with top quality, genuinely helpful and friendly customer service & a quality vehicle! Thanks all! (Paul is a top bloke) Lp
Lewis P
Lewis P
05:34 21 Jul 17
Great customer service, very professional. Even after having a minor issue with our car after purchase Paul & Jeff sorted everything out for us immediately with very little fuss to make sure we were happy. Highly recommend and will make sure we refer family and friends their way.read more
Vikings Rugby
Vikings Rugby
05:40 06 Jul 17
I bought my Defender 130 from Paul and Jeff...They were bombarded with calls from the "Defender Crazies" but I was the lucky one to get it. It's 15 years old Defender so has it's issues but they sorted out Fuel Pump, Doors, new brakes, full service, light switch and a number of small items before I took delivery! The doors were still an issue but they were happy to give it another go and it was sorted, no questions asked. I've since asked for their advice on a number of improvements I've wanted to make to it and they were great at putting me in touch with local shops and arranging good prices. Thanks Guys...Let me know first when you get your hands on another Defender and thanks for all the favours!read more
Mark Fermor
Mark Fermor
08:44 19 Apr 17
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JZ motors was recommended to us and we are very happy with the new car we purchased from them. They were professional and very helpful with everything. Thanks Jeff and AJ.read more
Deborah Hayes
Deborah Hayes
2019-10-16T23:09:46+0000
⭐⭐⭐⭐⭐ AJ was super helpful. Excellent customer service!!! Love the car!
Mannii Bakunawa
Mannii Bakunawa
2019-09-17T13:34:46+0000
Tracey Simpson
Tracey Simpson
2018-02-16T08:40:36+0000
Excellent customer service. Very knowledgeable. Exceeded all expectations.
Diana Eaves
Diana Eaves
2018-02-09T23:45:21+0000
Couldnt have been more looked after by the guys. Have bought multiple cars off JZ and the boys, and have never been disapointed.
Sean Connolly
Sean Connolly
2017-11-27T11:38:11+0000
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JZ Motors

1100 Burwood Highway
Ferntree Gully3156 Victoria

PH: 03 9752 2799
Fax: 03 9752 2965

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