A low supply of used vehicles has put the squeeze on auto dealers trying to scrape up inventory. But some in the industry have a possible solution for filling sparse lots — buying, reconditioning and selling lower-grade vehicles.
Normally, dealers prefer purchasing vehicles at auctions in the best condition. But used-vehicle prices have surged, forcing dealers to choose between spending more for a vehicle in good shape or fixing up one that's in a rougher state than desired.
Vehicles in poorer shape are those 2 to 4 years old with dents, scratches, bad brakes, torn seats and other wear. A number of dealers consider it risky or simply unprofitable to invest in them.
But dealerships with beefed-up reconditioning departments might find taking the plunge into more extensive work to be worth it, said Edward French, a proponent of reconditioning who has 47 years of experience in automotive retail.