Dealers need to innovate with used-vehicles
Skip to main content
Sister Publication Links
  • Automotive News Canada
  • Automotive News Europe
  • Automotive News China
  • Automobilwoche
AN-LOGO-BLUE
Subscribe
  • Subscribe
  • Account
  • login
  • HOME
  • NEWS
    • Dealers
    • Automakers & Suppliers
    • News by Brand
    • Cars & Concepts
    • Final Assembly
    • China
    • Shift
    • Mobility Report
    • Special Reports
    • Digital Edition Archive
    • This Week's Issue
    • Still no auto show, so Detroit tries car crawl
      Diess chose VW over CEO job at Tesla
      The special-edition GT-R Nismo goes on sale in North America this fall. It does not come with a Happy Meal.
      Nissan's 600-hp hamburger helper
      Prince Philip died April 9.
      Philip's custom Land Rover hearse gets called into duty
    • Shanghai Tesla protest
      Tesla apologizes as anxiety grows after driver protest
      Jaguar at Shanghai show.jpg
      Jaguar Land Rover expects luxury sales to grow in 2021
      Hyundai logo
      Hyundai Group to launch EVs every year starting in 2022
      The Ford Mustang Mach-E assembled at Ford's joint venture with Changan Automobile Co.
      Ford starts preorders for locally built Mustang Mach-E
    • Food is becoming a main dish on the AV menu
      Udelv CEO offers a historical perspective on high-tech goods delivery
      Q&A with BrightDrop CEO Travis Katz
      Automakers optimize manufacturing, customize products through digitization
    • Volvo Didi test car 2.jpg
      Volvo will provide XC90s for Didi's self-driving test fleet
      Hyundai logo
      Hyundai Motor Group names chief for new mobility division
      Tesla Autopilot web.jpg
      Tesla, ex-engineer settle lawsuit over Autopilot source code
      Cruise self-driving vehicle
      Cruise raises $2.75 billion from Walmart, others
    • Elon Musk interview
      Tesla’s Model Y, on sale since March, is a showcase of EV technologies competitors will benchmark.
      Technologies of Electrification
      Cadillac’s Lyriq EV will be unveiled Aug. 6.
      Future Product Pipeline
      A CALL TO ACTION
    • Lithia goes big on Michigan market
      Mercedes bypasses crossover route, enters EVs sedan-first
      Mercedes' new U.S chief: EVs won't kill profits
      Get even more Automotive News with our new app
    • Access F&I
    • Fixed Ops Journal
    • Marketing
    • Used Cars
    • Retail Technology
    • Sales
    • Best Practices
    • Dealership Buy/Sell
    • NADA
    • NADA Show
    • Automakers
    • Manufacturing
    • Suppliers
    • Regulations & Safety
    • Executives
    • Talk From The Top
    • Leading Women Network
    • Guide to Economic Development
    • PACE Awards
    • Management Briefing Seminars
    • World Congress
    • Aston Martin
    • BMW
      • Mini
      • Rolls-Royce
    • Daimler
      • Mercedes Benz
      • Smart
    • Ford
      • Lincoln
    • General Motors
      • Buick
      • Cadillac
      • Chevrolet
      • GMC
    • Honda
      • Acura
    • Hyundai
      • Genesis
      • Kia
    • Mazda
    • McLaren
    • Mitsubishi
    • Nissan
      • Infiniti
    • Stellantis
      • Alfa Romeo
      • Citroen
      • Chrysler
      • Dodge
      • Ferrari
      • Fiat
      • Jeep
      • Lancia
      • Maserati
      • Opel
      • Peugeot
      • Ram
      • Vauxhall
    • Renault
    • Subaru
    • Suzuki
    • Tata
      • Jaguar
      • Land Rover
    • Tesla
    • Toyota
      • Lexus
    • Volkswagen
      • Audi
      • Bentley
      • Bugatti
      • Lamborghini
      • Porsche
      • Seat
      • Skoda
    • Volvo
    • (Discontinued Brands)
    • Virtual reveals (Sponsored)
      • MITSUBISHI: 2022 Outlander
      • NISSAN: 2022 Pathfinder and 2022 Frontier
      • GENESIS: 2021 GV80
      • KIA: 2021 K5
      • LEXUS: 2021 IS
      • NISSAN: 2021 Rogue
      • TOYOTA: 2021 Venza and 2021 Sienna
    • Auto Shows
    • Future Product Pipeline
    • Photo Galleries
    • Car Cutaways
    • Design
  • OPINION
    • Blogs
    • Cartoons
    • Keith Crain
    • Automotive Views with Jason Stein
    • Columnists
    • China Commentary
    • Editorials
    • Letters to the Editor
    • Send us a Letter
    • used car blog art 2010 Mini Cooper
      Used-car market sizzling for sellers, not so great for buyers
      It's time to rethink EV range
      Mercedes EQS mirrors web.jpg
      For the EQS, Mercedes likes what it sees in the mirror
      Mach-E
      For Ford, 3rd-party charging network must improve to reap Mustang Mach-E potential
    • EVs Arrived EVentually
      EVs Came, EVentually
      In case of supply chain woes, break glass
      Quick! The Biden phone
      VW's Joke Is On You
      Joke Is On You
      view gallery
      4 photos
      Leo Michael Cartoons - Q2 2021
    • Shifting gears away from the stick shift
      SEMA still a wonderful circus
      Penske still has plenty of races to win
      Ford's turn in the hot seat
    • April 20, 2021 | The future of working may be hybrid
      April 13, 2021 | GM shows it’s serious about electric
      April 6, 2021 | For Volkswagen, authenticity is the only path forward
      March 30, 2021 | Tesla “changes” car industry
    • Supreme Court must preserve system that has delivered huge reductions in emissions
      Tom Roberts
      Will the auto industry rethink supply chain disruption now?
      Dave Versical
      For Manheim head, fighting anti-Asian hate is personal
      GM lost a lot on EV1, but project pays dividends
    • Why Xiaomi holds promise of becoming formidable EV player
      Geely’s new EV push is decidedly new age
      Charging poles installed outside a Tesla store in downtown Shanghai.
      Unreliable public EV charging sites prompt automakers to take wheel
      VW Group's playbook to dominate EV market
    • Despite demise, EV1 was a risk worth taking
      A step in right direction for Nissan dealers
      ‘Voltswagen' April Fools' gag far from funny
      Less is more in lineups as well as on lots
    • Lunn was behind vehicles with impact
      With EVs, bias for traditional carmakers
      ‘Voltswagen' was clever and fun
      Mixed-use plan a winner
  • DATA CENTER
  • VIDEO
    • AutoNews Now
    • First Shift
    • Special Video Reports
    • Weekend Drive
    • AutoNews Now: Stellantis managers indicted on emissions fraud
      AutoNews Now: Toyota's Carter says EV portfolio will be varied
      AutoNews Now: Ram output said to be slowing as COVID cases surge
      AutoNews Now: Stellantis outlines electrification targets for U.S., Europe
    • First Shift: Tesla's Musk: Autopilot not in use during deadly crash
      First Shift: GM: Market could alter 2035 EV goal
      First Shift: Indicted ex-Nissan exec Kelly 'blameless,' U.S. senator says
      First Shift: Ford, Nissan plan more downtime amid chip crisis
    • The life, death and legacy of GM's groundbreaking EV1
      Face-to-face with the General Motors EV1
      Toyota store's in-house training program retains more techs
      Virtual sales manager Jay Barger
      'Glued to a phone': Acura store's virtual sales boss lifts deliveries, efficiency
    • Why the pickup is the auto industry's 'battleground'
      Carlos Ghosn's quest to restore his reputation
      Why Ford must execute to avoid 'deep trouble'
      Why Honda is 'locked and loaded' for 2020
  • EVENTS & AWARDS
    • Events
    • Awards
    • Congress Conversations
    • Retail Forum: NADA
    • Canada Congress
    • Europe Congress Conversations
    • Fixed Ops Journal Forum
    • Shift: Mobility at a Crossroads
    • 100 Leading Women
    • 40 Under 40 Retail
    • All-Stars
    • Best Dealerships To Work For
      • Register for the 2021 Best Dealership To Work For
    • PACE Program
    • Rising Stars
    • Europe Rising Stars
  • JOBS
  • AN Solutions
  • +MORE
    • Leading Women Network
    • Podcasts
    • Webinars
    • In the Driver's Seat
    • Publishing Partners
    • Classifieds
    • Companies on the Move
    • People on the Move
    • Newsletters
    • Contact Us
    • Media Kit
    • RSS Feeds
    • Shift: A Podcast About Mobility
    • Special Reports Podcasts
    • Daily Drive Podcasts
    • AAM
    • Cars.com
    • DealerPolicy
    • Gentex
    • IHS Markit
    • Remember Group
    • Reputation.com
    • Ricardo: Dave Shemmans
    • Ricardo: Marques McCammon
    • Allstate: Want more from your F&I?
    • Ally: Navigating the future of automotive retailing
    • Amazon Web Services: Any place, any time, any channel
    • Amazon Web Services: The power of the cloud
    • Amazon Web Services: Universal translator: Harnessing sensor data to build better automotive software
    • Capital One Auto: Dealerships remain vital to an increasingly digital car shopping journey
    • DealerSocket: 5 steps to modernizing the buyer's journey
    • Epic Games: Build stunning, real-time car configurators with Unreal Engine
    • Epic Games: Real-time tech is the next frontier of automotive
    • Epic Games: Transforming the auto industry with digital assets
    • FTI Consulting: Crisis as a catalyst for change
    • Google: 5 trends shaping the auto industry's approach to a new normal
    • Google: Google's dealer guidebook helps dealers navigate today's digital landscape
    • IHS Markit: Automotive loyalty in the wake of the COVID-19 recession
    • IHS Markit: COVID-19: The future mobility delusion
    • Level5: 2020 Automotive E-Commerce Report
    • Motormindz: Toward hyperconnectivity: 5 ways to position your business to profit from connected car
    • Naked Lime: Bring social reputation together as part of big-picture marketing
    • Ally: Do It Right
MENU
Breadcrumb
  1. Home
  2. Dealers
November 19, 2018 12:00 AM

Used-vehicle space ripe for innovation

David Muller
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Dealer Rick Ricart, second from left, warns dealers not to be "left in the dust."

    PHOENIX — Shrinking profit margins and rising prices for new vehicles highlight the growing opportunity for dealerships in the used-vehicle space.

    And that side of the business is also where much of the disrupter-caused experimentation is taking place in auto retailing. Dealers, auction companies and analysts echoed that message at the 2018 Used Car Week in suburban Phoenix last week.

    Dealers who aren't treating used cars like their own franchise are doing a major disservice to themselves, said Rick Ricart, president of Ricart Automotive Group in Columbus, Ohio. Used vehicles are ripe for entrepreneurship, Ricart told a receptive crowd at the annual event.

    "If you're not sourcing cars yourself, if you're not scaling and growing your used-car operation, I feel like you're going to be left in the dust," Ricart said.

    Affordability challenges on the new-vehicle side of the business also make the used-vehicle side an increasingly necessary focal point.

    "One of the things that's driving the used-car industry right now, obviously, is the price of new cars," Don Luke, owner of Bill Luke Chrysler-Jeep-Dodge-Ram in Phoenix, said during a session about certified pre-owned vehicles.

    Noting the rise, he added, "People who are going to get a car for their kids, you know, $30,000 is nuts." They would rather buy a 1- or 2-year-old car for around $20,000.

    One advantage dealers have on the used side is greater control over their inventory and marketing.

    "We're going to see the revolution in the way people buy cars at retail first in the used market," said Jonathan Banks, vice president of vehicle valuations at J.D. Power. But it's a double-edged sword; the space is also fit for greater retail disruption.

    Banks noted recent developments that underscore how traditional dealers will increasingly have nontraditional competition.

    This month, Carvana, the online-focused retailer that is growing at a fantastic clip, announced it had been given an additional $2.3 billion in financing commitments from Ally to support its inventory needs. The company also reported triple-digit increases in revenue and vehicle sales volume for the third quarter, though it is still losing money overall. Carvana's rise has come without traditional brick-and-mortar stores and salespeople, and traditional dealers have enviably noticed the company's lower overhead costs because of that.

    In September, San Francisco-based startup Shift Technologies Inc. announced a $54 million investment from Lithia Motors Inc. Lithia CEO Bryan DeBoer said the investment in the online used-car retailer will allow Lithia to offer more shopping options to consumers. Shift, meanwhile, is keen on leveraging Lithia's physical properties to supplement its storage facilities.

    As retailing continues to move more online and as transportation service fleets increase, traditional dealers could find themselves well-positioned with the physical space to help new players manage and service large fleets.

    To that end, Ricart recently bought a 130,000-square-foot warehouse across the street from the group's Ford dealership to support an apparently growing fleet management business. It will allow Ricart Automotive Group to service more fleet customers. But also, Ricart said, it will accommodate cars and trucks that need servicing if mobility and autonomous driving technology puts vehicles otherwise sitting in owners' driveways into heavy, shared use.

    "Things are going to have to go down the road," Ricart said. "We have a massive infrastructure of roads around this country, so as long as there's going to be tires on them, they're going to wear out and we're going to replace them."

    Becca Polak, chief legal officer for KAR Auction Services Inc. who also heads its TradeRev unit, noted that rising mobility options, digital retailing and margin compression are among the micro and macro issues causing traditional dealers to get more creative and look beyond the new-vehicle franchise.

    "It can't just be about the new cars anymore," Polak said.

    Dealers have to find new ways to be profitable, and it has to involve used vehicles and service.

    "That's just a new way of thinking, and things are happening so quickly in all those areas — mobility, data and digital — [dealers] really need to be proactive," she said, noting Ricart's fleet-servicing warehouse as an example. "If you're being proactive about it, you're going to be in a better place in five years than other dealers."

    RECOMMENDED FOR YOU
    AutoNation to acquire 11 dealerships
    Letter
    to the
    Editor

     

     

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    AutoNation to acquire 11 dealerships
    AutoNation to acquire 11 dealerships
    Braman dealerships affected by cyberattack, report says
    Braman dealerships affected by cyberattack, report says
    AutoNation Q1 net income up; AutoNation USA store goal expanded
    AutoNation Q1 net income up; AutoNation USA store goal expanded
    Plant manager to young women: ‘Never underestimate yourself’
    Sponsored Content: Plant manager to young women: ‘Never underestimate yourself’
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    See more newsletter options at autonews.com/newsletters.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Digital Edition
    Automotive News 4-19-21
    THIS WEEK'S EDITION
    See our archive
    Fixed Ops Journal
    Fixed Ops Journal 4-12-21
    Read the issue
    See our archive
    RETAIL TECHNOLOGY NEWSLETTER: Sign up for our Tuesday afternoon newsletter that breaks down the latest developments in how technology is changing the auto sales landscape.
    AUTOMOTIVE NEWS TV WITH TOM WOROBEC: Sign up for our afternoon newscast and catch up on the top news of the day with our brief video roundup.
    Get Free Newsletters

    Sign up and get the best of Automotive News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    Subscribe Now
    Connect With Us
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter

    Our mission

    The Automotive News mission is to be the primary source of industry news, data and understanding for the industry's decision-makers interested in North America.

    AN-LOGO-BLUE
    Contact Us

    1155 Gratiot Avenue
    Detroit, Michigan
    48207-2997

    (877) 812-1584

    Email us

    Automotive News
    ISSN 0005-1551 (print)
    ISSN 1557-7686 (online)

    Fixed Ops Journal
    ISSN 2576-1064 (print)
    ISSN 2576-1072 (online)

    Resources
    • About us
    • Contact Us
    • Media Kit
    • Subscribe
    • Manage your account
    • Reprints
    • Ad Choices Ad Choices
    • Sitemap
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • HOME
    • NEWS
      • Dealers
        • Access F&I
        • Fixed Ops Journal
        • Marketing
        • Used Cars
        • Retail Technology
        • Sales
        • Best Practices
        • Dealership Buy/Sell
        • NADA
        • NADA Show
      • Automakers & Suppliers
        • Automakers
        • Manufacturing
        • Suppliers
        • Regulations & Safety
        • Executives
        • Talk From The Top
        • Leading Women Network
        • Guide to Economic Development
        • PACE Awards
        • Management Briefing Seminars
        • World Congress
      • News by Brand
        • Aston Martin
        • BMW
          • Mini
          • Rolls-Royce
        • Daimler
          • Mercedes Benz
          • Smart
        • Ford
          • Lincoln
        • General Motors
          • Buick
          • Cadillac
          • Chevrolet
          • GMC
        • Honda
          • Acura
        • Hyundai
          • Genesis
          • Kia
        • Mazda
        • McLaren
        • Mitsubishi
        • Nissan
          • Infiniti
        • Stellantis
          • Alfa Romeo
          • Citroen
          • Chrysler
          • Dodge
          • Ferrari
          • Fiat
          • Jeep
          • Lancia
          • Maserati
          • Opel
          • Peugeot
          • Ram
          • Vauxhall
        • Renault
        • Subaru
        • Suzuki
        • Tata
          • Jaguar
          • Land Rover
        • Tesla
        • Toyota
          • Lexus
        • Volkswagen
          • Audi
          • Bentley
          • Bugatti
          • Lamborghini
          • Porsche
          • Seat
          • Skoda
        • Volvo
        • (Discontinued Brands)
      • Cars & Concepts
        • Virtual reveals (Sponsored)
          • MITSUBISHI: 2022 Outlander
          • NISSAN: 2022 Pathfinder and 2022 Frontier
          • GENESIS: 2021 GV80
          • KIA: 2021 K5
          • LEXUS: 2021 IS
          • NISSAN: 2021 Rogue
          • TOYOTA: 2021 Venza and 2021 Sienna
        • Auto Shows
        • Future Product Pipeline
        • Photo Galleries
        • Car Cutaways
        • Design
      • Final Assembly
      • China
      • Shift
      • Mobility Report
      • Special Reports
      • Digital Edition Archive
      • This Week's Issue
    • OPINION
      • Blogs
      • Cartoons
      • Keith Crain
      • Automotive Views with Jason Stein
      • Columnists
      • China Commentary
      • Editorials
      • Letters to the Editor
      • Send us a Letter
    • DATA CENTER
    • VIDEO
      • AutoNews Now
      • First Shift
      • Special Video Reports
      • Weekend Drive
    • EVENTS & AWARDS
      • Events
        • Congress Conversations
        • Retail Forum: NADA
        • Canada Congress
        • Europe Congress Conversations
        • Fixed Ops Journal Forum
        • Shift: Mobility at a Crossroads
      • Awards
        • 100 Leading Women
        • 40 Under 40 Retail
        • All-Stars
        • Best Dealerships To Work For
          • Register for the 2021 Best Dealership To Work For
        • PACE Program
        • Rising Stars
        • Europe Rising Stars
    • JOBS
    • AN Solutions
    • +MORE
      • Leading Women Network
      • Podcasts
        • Shift: A Podcast About Mobility
        • Special Reports Podcasts
        • Daily Drive Podcasts
      • Webinars
      • In the Driver's Seat
        • AAM
        • Cars.com
        • DealerPolicy
        • Gentex
        • IHS Markit
        • Remember Group
        • Reputation.com
        • Ricardo: Dave Shemmans
        • Ricardo: Marques McCammon
      • Publishing Partners
        • Allstate: Want more from your F&I?
        • Ally: Navigating the future of automotive retailing
        • Amazon Web Services: Any place, any time, any channel
        • Amazon Web Services: The power of the cloud
        • Amazon Web Services: Universal translator: Harnessing sensor data to build better automotive software
        • Capital One Auto: Dealerships remain vital to an increasingly digital car shopping journey
        • DealerSocket: 5 steps to modernizing the buyer's journey
        • Epic Games: Build stunning, real-time car configurators with Unreal Engine
        • Epic Games: Real-time tech is the next frontier of automotive
        • Epic Games: Transforming the auto industry with digital assets
        • FTI Consulting: Crisis as a catalyst for change
        • Google: 5 trends shaping the auto industry's approach to a new normal
        • Google: Google's dealer guidebook helps dealers navigate today's digital landscape
        • IHS Markit: Automotive loyalty in the wake of the COVID-19 recession
        • IHS Markit: COVID-19: The future mobility delusion
        • Level5: 2020 Automotive E-Commerce Report
        • Motormindz: Toward hyperconnectivity: 5 ways to position your business to profit from connected car
        • Naked Lime: Bring social reputation together as part of big-picture marketing
        • Ally: Do It Right
      • Classifieds
      • Companies on the Move
      • People on the Move
      • Newsletters
      • Contact Us
      • Media Kit
      • RSS Feeds