New Trade Group Serves Pre-Owned Dealer Niche

A new trade group aims to help auto dealers with their used-car operations, particularly retailers who lost new-car franchises as part of General Motors Co.'s and Chrysler Group LLC's dramatic reorganization plans.

The creation of the Pre-Owned Automobile Dealers Alliance came about largely due to those franchise terminations, says founder Ron Smith of the Cherokee Automotive Group that publishes Auto Remarketing and puts on the annual National Remarketing Conference.

“Where do those people go?” he says. “A lot of them are getting totally into the late-model pre-owned business.”

POADA is for dealers selling used cars that are no older than five years old and that have traveled fewer than 100,000 miles (160,000 km). “Think of it as a market segment between new cars and older used cars,” Smith says.

He emphasizes the alliance is not an association. “We urge members to join dealer associations, such as the National Automobile Dealers Assn. We're like a chamber of commerce.”

POADA offers members various services. Those include educational, training and best-practices programs as well as networking opportunities and cooperative discount buying.

A certified pre-owned program is available, with Automobile Protection Corp. providing extended warranties.

“When so many new-car dealers lost their franchises, they also lost their factory certified pre-owned programs,” Smith says. “We thought, ‘What if the alliance has its own CPO program backed by a national company?’”

Franchised dealers may only participate in certified programs for the brands they represent. But the POADA program allows members to certify any make they sell.

Although the stereotype of the small and seedy used-car lot persists, more and more pre-owned stores are sophisticated business enterprises with modern facilities. That's especially true as more former franchised dealers join the ranks.

“These places look like franchised operations, but they're not,” Smith says.

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