NAPERVILLE, Ill. -

In an effort to secure enough used inventory to the meet the needs of its customers, an Illinois BMW dealership is reaching out to area consumers in hopes to buy $3 million worth of used vehicles this month.

Bill Jacobs BMW of Naperville, Ill., launched its “Major Buy Back Event” on Friday and is looking to buy used BMW, Audi, Mercedes-Benz, Lexus and Infiniti vehicles from consumers, and is willing to either purchase the cars outright or as part of a trade-in for a new vehicle.

The promotion — which runs through the end of September — is designed to “to keep up with ever-increasing sales demand,” the dealership said.  The store is encouraging residents of Naperville, Aurora, Geneva, Saint Charles, Wheaton, Glen Ellyn, Downers Grove, Hinsdale, LaGrange, Chicago, Burr Ridge, Schaumburg, Elmhurst, Plainfield, Westmont, Oak Brook, Orland and Tinley Park to participate.

Bill Jacobs BMW said in a statement Friday that according to general manager Grant Paullo, the uptick in used-car demand is due to “the slow-moving economy and peaking gas prices.”

The store stressed, “The need for an affordable replacement vehicle with good fuel economy is what drives consumer demand for midsize, compact and subcompact cars, and this ultimately has led to the desire for an increase in inventory.”

The Illinois dealership’s campaign comes at a time where used supply is improving, but still challenging for dealers.

CNW Research reported last month that the nation’s used supply was close to 55 days, which marked a 15-percent year-over-year gain and the highest level so far in 2012. However, CNW president Art Spinella stressed that neither the used-car nor new-car market were “out of the woods just yet.”

Furthermore, around mid-August, NADA Used Car Guide executive automotive analyst Jonathan Banks said in a Guidelines report that “late-model used vehicle supply remains tight.”

So, many dealers — like Bill Jacobs BMW — are turning to creative strategies to feed their used-car pipelines. For instance, that includes utilizing the service lane.

While there are often strategic intricacies involved, the concept, simply put, is this: a customer comes through the service lane with a vehicle that meets a dealer’s used-car inventory needs, and the dealer puts together an offer to acquire the vehicle.

And Hendrick BMW out of Charlotte, N.C. is one that has successfully bolstered its used inventory by employing this method.

With the normally strong off-lease supply from BMW slowing a bit from the fallout of the leasing pull-back several years ago, Steve Strickland — Hendrick BMW’s pre-owned director — said “we’ve had to look outside.”

In doing so, the store has found that the service lane was another viable option to find used cars.

“We’ve tried a couple different approaches with this, and some months are better than others, but it generates customers that will come back later and either buy from you or just outright sell it to you. It’s made some activity happen,” he told Auto Remarketing in a recent interview.

The dealership was one of two profiled in a recent case study provided to Auto Remarketing by FirstLook about this technique and how the inventory management company’s offering can help dealers in this regard.

In its report, FirstLook discussed the successes found by both Hendrick BMW and Penske Honda (which is out of Indianapolis) in using the service lane as a used-car resource.

“For the greatest success, both dealerships feel there is a short window of opportunity when customers will respond to an offer they hadn’t considered when they arrived for service,” the company wrote in the report. “You need to quickly identify customers who own the vehicles that will be most lucrative for your pre-owned lot. And you need the confidence to make an accurate offer that will leave plenty of margin when you place that vehicle in your stock.

“For this, both Hendrick BMW and Penske Honda have turned to FirstLook 3.0 to assure profitability in their service lane purchases,” it continued.

Of course, there are other inventory management platforms on the market, including those provided by such companies as vAuto, Reynolds and Reynolds, Dominion Dealer Solutions and more. vAuto, for instance, is what Brian Benstock of Paragon Auto Group employs in using the service lane to grab used vehicles. Benstock also shared some insight on this service-lane practice with Auto Remarketing.

Benstock — the vice president and general manager of Paragon Honda and Paragon Acura, which won Auto Remarketing’s inaugural CPO Dealer of the Year Award in 2010 — has been turning to the service lane to find vehicles for several years now.

“It’s huge,” he said of the importance of this technique, pointing out the dealer is bidding for used cars without competition, with less pressure, and it lets him pick and choose what he wants. Benstock will be presenting at this year’s CPO Forum, which is part of the Used Car Week series of conferences.

Continuing along, Benstock also noted that using this inventory approach  allows the dealer to create multiple transactions at once. In his approach, the store gets a used vehicle for its inventory and then also sells that customer another car, as well. In fact, he said a new- or used-vehicle sale is “always attached” to the deal. Then, of course, that customer can come back for things like service visits.

And while Hendrick BMW does not require another transaction be involved, the store has spurred additional sales through this approach.

“We had a customer in the other day that was one of our BMW customers, and we started the process of buying their car,” Strickland said. “And while they were here, they walked over to our Mini Cooper store, and then we ended up converting it over for a trade-in on a Mini Cooper, so they could help on the sales tax savings.

“We’re seeing more and more of that,” he said. “There are a couple different avenues for it, but our main thing was to source inventory. But now we’re seeing that it’s creating sales.”

Using the service lane to generate used inventory was one of several techniques noted by Michele Peterson, global director of the Urban Science Dealer Services Group, when she talked to Auto Remarketing about how dealers can best source units specifically for their certified pre-owned operations.

“We all know that inventory levels of eligible CPO units are down, and so from a dealer’s perspective, you really have to start to look at all of your available resources as far as stocking such units,” said Peterson. “You’ve got to just start looking and re-looking at all your available options on a more frequent basis than you probably would (otherwise).”

The more successful CPO dealers are the ones that are able to adapt to this and review their inventory more frequently, she noted. In fact, Peterson said she has seen some dealers who re-examine their used supply every two to three weeks, “because if you snooze, you lose. You’ve got to be ready and on top of what’s available so you can try to grab it.”

However, with the pipelines of supply being “quite short,” Peterson recommends getting the most out of what’s available.

She said, “One of the things that we would be focusing on from a Dealer Services Group perspective … is talking to them about maximizing all of the opportunities that they have in the pipeline” through the various supply channels.

Those include utilizing auctions, trade-ins and the service department, to find the necessary supply, Peterson added. In regards to the service lane, she said that is often one of the sourcing areas that perhaps is “neglected.”

“We see a lot of options through the service department, where people are constantly bringing their cars in for service,” Peterson stated. “We see that as another pipeline for you to improve on your inventory options.”