How high-mileage vehicles turn into sales for car dealers

Welcome to spring 2022, an upside-down world where new- vehicle dealers are so desperate for used-car inventory they are taking trade-in vehicles with mileages deep into the six figures and sending them to the front line.

A scan of used-car inventories from Florida to California shows many new-car dealers are offering vehicles with mileages of 175,000 or more.

At Sun State Ford in Orlando, a 2006 Toyota Tacoma with 204,000 miles barely made it out of the service department before it was sold, says Anthony Silvio, the store's used-car director. Another recent sale: a 2013 Toyota Prius with 180,000 miles.

"Before the pandemic and the shortage of cars happened, anything over 150,000 miles we really didn't touch. But the way the market is made us stretch a little more," Silvio says.

Those super-high-mileage vehicles, he says, went directly to auction before the pandemic and new-car shortages drove up prices of used vehicles. From the auction, they'd likely land on a buy-here, pay-here lot.

But dealers have found that extra checks in the service department on well-maintained, high-mileage vehicles, along with more extensive reconditioning work, can make a high-mileage vehicle not only viable, but profitable.

LaFontaine Buick-GMC in Highland, Mich., west of Detroit, recently put a 2013 GMC Acadia with 270,407 miles under its wheels on the store's front line after technicians checked every critical system. They tested the engine's compression and oil pressure, inspected the transmission and tested the vehicle's electrical, safety, suspension and emissions systems. They made sure the expensive catalytic converter was in serviceable condition.

Any major defects rendering the GMC unsafe or unreliable would have immediately routed it to the auction, said Gordy Koenig, one of the store's used-vehicle directors.

The Acadia's 3.6-liter V-6 engine starts right up and idles smoothly — no knocks, ticks or smoke. The large crossover's metallic black paint still shines, despite nearly a decade on Michigan's potholed and winter-salted roads. There's no rust on the undercarriage. The exterior brightwork and wheels don't show abnormal wear. The infotainment screen is clear and bright, and the backup camera works as it should. The owner's manual, still wrapped in plastic, is in the glove box. Only the driver's seat gives away the high mileage. The foam on the lower cushion has lost its springiness, and you just kind of sink into the seat.

The CarFax report details the one-owner crossover averaged 32,000 miles per year, but the vehicle received regular service and frequent oil changes. The asking price: $9,650.

Experts say high-mileage vehicles on the front line at new-car dealerships is not just a temporary trend that will fade once the new- and used-vehicle markets stabilize.

"I think there will be a new normal where [dealers] carry more older vehicles. They are seeing that they can do this correctly," says Mike Boyd, founder of iRecon, part of vAuto, a unit of Cox Automotive. "There is a lot of money to be made before the car ever retails. And there is also great money to be made when the car retails."

Two things are changing the used-car market. First, today's vehicles last much longer than 100,000 miles; used-car customers know it and are getting more comfortable buying well-maintained, high-mileage vehicles.

Second, the price of used vehicles with six-figure mileage makes them affordable to buyers priced out of the market for most 2- and 3-year-old used cars. Cox Automotive data shows used-vehicle prices were 37 percent higher in January 2022 than January 2021.

Says Boyd: "Today's cars are so much better engineered and put together. It comes down to the pedigree. If they are taken care of and maintained, that 200,000-mile car is now in that old 100,000-mile price range."

To hear Eric Benson, another used-car director at LaFontaine, tell it, there is a customer for every car — even one such as the Acadia.

Data showed the Acadia's ad on the store's website had a 53 percent click-through rate, meaning potential buyers were giving the crossover serious virtual kicks in its tires.

"With cars like that, we try to diversify and meet the needs of all customers," Benson says. "It's a safe car or else it wouldn't be up for retail."

The store might invest as much as $3,000 reconditioning a high-mileage vehicle, says Paul Householder, LaFontaine's fixed ops director. The service department makes the call on whether a high-mileage vehicle makes it to the front line or is sent to auction. Occasionally, the store will sell a used vehicle that needs repairs the store won't do. But those vehicles are advertised as such, and the store shares all the details of its inspection with potential customers.

"For us, our reputation is everything," Householder says. "Before any vehicle leaves our facility, it has to be pristine. It has to be safe. We look at it as if our mother or grandmother could be driving that car."