Used Car Sales Continue Rising among Franchised Dealers

June 2, 2014
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Used Car SalesUsed car sales are an especially hot topic among automotive dealers. More than ever before, franchised auto dealers are realizing they should be putting a special emphasis on this market. With this change in focus comes a predictable change in sales numbers, too.

The 2014 Used Car Market report, put out by Manheim, shows that franchised car dealerships in the United States sold more than 15.5 million used cars in 2013, just about the same number of new cars they sold. 

What’s more, a recent article published in Ward’s Auto pointed out that 2012 was the first year franchised dealers actually had more used car sales than car lots that exclusively sold used automobiles. In 2013, the difference was even larger, as their report says franchised dealers sold approximately 1.3 million more used vehicles than used car lots.

Why Used Car Sales Market Has Changed

Why has such a shift in emphasis taken place? Much of it can be directly linked to the Internet. Because so many customers buying new cars are so educated before they ever set foot into a dealership, the profit margins on new cars have dipped significantly. But because the prices on used car sales are much more difficult to pin down, it’s a different ballgame. As a result, very often the profits are higher on a used car than a new one.

When a business begins to lose some of their profit, they start to look for other ways to recoup it … and that’s exactly what these franchised automotive dealers have done. Used car sales are the most logical place to start, and some have even gone to great lengths to capitalize on this profit source. Some have significantly increased their used car inventories, while others have taken a much bigger step by opening their own specific used-car only dealerships close by – but off property from – their franchised stores.

 

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