Scale can be a wonderful thing for a car dealer. It makes for bigger discounts from vendors, reduces infrastructure costs and allows dealers to experiment.
Take, for example, Blaise Alexander Family Dealerships, headquartered in Lycoming County in central Pennsylvania. The group's 36 franchises spread across 18 rooftops generate enough trade-ins to allow it to operate its own weekly auto auction, where it wholesales its slow-selling used vehicles to other dealers.
And though it's early days, the experiment looks to be a roaring success, group President Blaise Alexander says.
"I tell some of my new-car dealer friends — some of the bigger guys — that I'll come down and help them engineer their own auction," said Alexander. "It is a winner, an absolute winner."
The dealer-only auctions are wholesaling about 120 vehicles per week, mainly to independent dealers in the region.
"These are primarily high-mileage units, maybe banged up a little, or maybe with some rust or engine/transmission problem cars, and we announce everything that we know about," said Alexander. "We've already developed a pretty good following, and we have a good sale each week."