Used cars were lifeblood of business in '21

With the microchip shortage and other supply chain hiccups making new vehicles hard to come by in 2021, auto retailers boosted their focus on selling used cars and trucks as they faced heightened consumer demand.

Big publicly owned retailers with a hefty online presence expanded their used-vehicle sales volumes in 2021, and traditional dealership groups put their backs into reeling in more used cars to bolster their inventories. The resulting sales became a lifeline for their businesses as they dealt with fewer new vehicles to offer customers.

Those efforts were reflected in Automotive News’ annual list of the top 100 retailers ranked by used-vehicle sales. The vast majority of companies on the list reported gains in the number of used vehicles they retailed in 2021.

CarMax Inc. kept its spot as the No. 1 used-vehicle retailer in the nation, with 924,338 sales in its fiscal 2022, which ended Feb. 28. That reporting period most closely corresponds to the 2021 calendar year covered by the list. CarMax’s sales rose 23 percent from 751,862 in its previous fiscal year.

“We’re proud to be the nation’s largest buyer and seller of used cars, and it’s due to the hard work of our talented associates and our relentless focus on providing customers the best experience in the industry,” CarMax CEO Bill Nash said in a statement.

Carvana Co. landed at No. 2 for the second year in a row. The online upstart retailed 425,237 used vehicles last year, up 74 percent from 2020. Carvana first entered the list with its 2018 sales, landing at No. 8.

Rounding out the top five were: AutoNation Inc., holding on to its No. 3 position with retail sales of 304,364 used vehicles; Lithia Motors Inc., overtaking the No. 4 spot with 275,495 used vehicles sold; and Penske Automotive Group Inc., slipping one spot to No. 5 with retail sales of 264,520 used vehicles.

Sonic Automotive Inc. kept its No. 6 spot, and Group 1 Automotive Inc. held at No. 7. Asbury Automotive Group Inc. rose a spot to No. 8, with 105,206 used vehicles sold, knocking Hendrick Automotive Group to No. 9. Hendrick retailed 100,100 used vehicles in 2021.

Online used-vehicle retailer Vroom Inc. broke into the top 10 for the first time, rising four spots to No. 10 after retailing 80,910 used vehicles in 2021.

And Shift Technologies Inc., another online retailer, leaped 56 spots to No. 33 after more than doubling the number of vehicles it sold, to 23,251 in 2021. Shift was the largest upward mover on the list.

Several dealership groups made big jumps in the ranking as they bolstered their sales in 2021, with car buyers who couldn’t obtain new vehicles turning to used ones.

Swickard Automotive Group, of Gladstone, Ore., rose 37 spots to No. 48, the second–largest ascent up the list. The group retailed 17,403 used vehicles in 2021, up 74 percent from 2020.

Zeroing in on used vehicles provided a “big boost to the business” and ultimately punched up the group’s bottom line, said Greg Gates, Swickard’s vice president of business transformation.

As long as uncertainty over new-vehicle production and availability persists, dealers will likely keep the focus on selling and replenishing their critical used-vehicle inventory, Gates said. “We’re going to continue to focus on selling used cars and making sure our guests have something to drive if that’s what they come in needing,” he said.

LaFontaine Automotive Group had the third-largest jump up the list. The group based in Highland, Mich., rose 36 spots to No. 40. It retailed 19,573 used vehicles in 2021, up 75 percent from the previous year.

Selling used cars was always a key focus for LaFontaine, but the coronavirus pandemic and chip shortage made company leaders realize used-vehicle sales are the lifeblood of the dealership business, said Max Muncey, LaFontaine’s senior manager of corporate communications.

In previous years, LaFontaine carried $30 million to $35 million of used-vehicle inventory. Last year, the group increased that to well over $100 million, Muncey said.

LaFontaine ramped up its attempts to obtain used vehicles, and its buying center team was “extremely aggressive" in seeking inventory, Muncey said. That included scouring Facebook Marketplace and Craigslist, while some employees drove around looking down driveways for cars marked with “for sale” signs. LaFontaine implemented an instant pay option so consumers selling their cars to the group could get their money more quickly, Muncey said.

Obtaining vehicles from lease turn-ins also became very important, he added.

“We probably took for granted the volume that we sold [on the new-car side] and took for granted the volume of lease turn-ins that we normally were getting at our stores," Muncey said.