Used Cars on a Roll as Quality Gains
The top 100 dealership groups, according to Automotive News data, last year boosted their sales by 9 percent and revenues by 11 percent.
These increases underscored the growth of pre-owned non-fleet units and lifted registration of pre-owned vehicles in the U.S. to 6 percent of the 34,541,918 vehicles in operation.
What this means for the individual dealer can be shown by sales numbers for trade-ins at such high-ranking used-car operations as CarMax, Germain Motor Co., based in Columbus, OH, and Penske Automotive, based in Bloomfield Township, MI.
CarMax retained its No. 1 spot as used-car and truck seller, rising 3 percent to a near record, 408,000 units.
The biggest individual dealer group gainer was Germain, who jumped 15 percent to 1,756 units.
Owner Steve Germain, speaking for new-car dealerships in general, said used-units moved upward because trade-ins are “better quality” now as a reaction to the recession’s ending. “Today a 10-year old Cadillac or Avalon is not so risky as it was in the 1970s or 1960s.”
The second-ranked Penske Automotive Group has been on a “used-car surge,” says executive V-P Tony Pardon.
Penske’s network sold 145,580 used cars last year, up 24,079 from 2011. Penske dealers have a goal of selling one used for every sold new vehicle, including Bentleys and Lincolns.
According to NADA data, used-car revenues accounted for 32 percent of total revenues of its membership last year.
“Focus on useds has been sharpened so as to get the max out of each department,” says CEO Frank McLarty, of the Landers Group in Little Rock, AK.