Dealers Struggle to Stock Used Cars

“Used-vehicle operations are important to dealers,” says National Automobile Dealers Assn. Chairman Stephen Wade, but some dealers struggle to find enough pre-owned vehicles to stock their lots.

It’s the old story of what happens when low supply meets high demand. Today, the used-car market is hot, but many popular models are scarce on the wholesale front.

“We’d love to sell more used cars and have them as a profit source, but there aren’t that many around to buy,” says Craig Miller, president of the 7-brand Clinton Auto Group near Davenport and general manager of Lindquist Ford in Bettendorf, IA.

He blames today’s low used-car availability on the lousy new-car sales years of 2008 and 2009.

“Used cars are tough to find and tough to buy at reasonable prices,” says Dale Smith, general manager of Village Volkswagen in Chattanooga, TN.

“My focus is to acquire them in trade-ins, but right now I only have three pre-owned VWs in stock,” he says.

“That is as low as it’s ever been. Typically there are 30. The rest of my used-car inventory is non-VW vehicles.”

More consumers are seeing the value of used cars. The rub for dealers is finding enough of them to meet demand, says Michael Baker, formerly of the Bob Baker Auto Group in San Diego.

Used-car operations “important to dealers,” says NADA Chairman Stephen Wade.

In contrast to the past, modern cars are better made and more durable, and consequently make excellent used cars.

Used-car buyers of the past took a reliability risk that is much greater than it is today.

“Last year, the age of the average car was nine years old; today it’s 11,” Baker says.“People realize the quality is much better.”

Used vehicles sold through certified pre-owned programs are inspected, reconditioned when necessary and come with warranties.

“CPO vehicles present great opportunities,” for sellers and buyers alike, Baker says.

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