With tight supplies of used vehicles, dealers should stock multiple brands and accept lower profits, says Dale Pollak, CEO of vAuto, a used-vehicle inventory management company.
"We need to rethink the rules of engagement for sourcing cars in this new environment," Pollak said during a Dec. 8 Automotive News Webinar, "How to Find Used Cars in a Time of Scarcity."
Pollak said annual new-vehicle sales of 16 million-plus earlier this decade generated an abundance of trade-ins that could be retailed as used cars and trucks. Additionally, auctions were overflowing with off-lease and retired rental vehicles.
But now those trade-ins have dwindled along with new-car sales. And with more dealers emphasizing their used-car operations, finding the right vehicle at the right price is more challenging.
Pollak said dealers must let go of old habits, such as stocking only brands consistent with the franchises they hold and vehicles that have sold well in the past.
He said dealers should seek any used vehicles that are in high demand and short supply because consumers are willing to pay more for them. Technology allows dealers to identify those vehicles, he said.
Pollak said dealers may have to pay more for the right vehicle and accept a lower profit. He said this isn't optimal but is sometimes necessary.
"There is a large, vibrant used-car market out there," Pollak said. "Dealers are heavily invested in facilities, equipment, people and processes that allow them to profit from the sale of any used vehicle."