Two large public auto retailers - Asbury Automotive Group and Lithia Motors Inc. - are launching used-vehicle brands.
Lithia says it eventually plans to create a chain of stand-alone used-car stores. Asbury, which tested stand-alone operations in Houston four years ago, intends to limit used-vehicle sales to its new-car dealerships.
The retailers say they believe a deeper dive into used-vehicle sales will boost returns for their investors. Profit margins typically are higher for used cars and trucks than for new vehicles. And the groups can expand used-car operations without automaker approval.
"We have to provide investors with the opportunity to grow their investment," says Lithia CEO Sid DeBoer.
Lithia's brand, "Assured Used Cars," kicks off April 1. Sales will include a three-day money-back guarantee, a 60-day/3,000-mile warranty and a vehicle history report from Carfax Inc. Lithia will sell the vehicles with no-haggle prices.
Asbury plans to launch its used-car brand by year end, CEO Ken Gilman told Automotive News. Sales will include a money-back guarantee within three to five days of purchase, he adds.