Welcome to another edition of Inside Automotive with Jim Fitzpatrick. Joining the show is Joe McCloskey, President of the National Independent Automobile Dealers Association (NIADA) and the owner of McCloskey Motors/Big Joe Auto in Colorado Springs, Colorado. Today, he discusses the state of the pre-owned vehicle market and the association’s upcoming Convention and Expo in June.
The cost of inventory remains very high, and the segment that appears to be most affected is the lower price range of under $20,000, explains McCloskey. Some vehicle models have doubled in value over the past two years, and auto dealers have more pressure to source the vehicles to supply consumer demand at this price point. There are also more cases of limited or no parts availability for some makes and models. The lack of availability creates friction in the reconditioning process and extends wait times for service customers.
McCloskey tells his dealer members to remain very resourceful in light of these challenges. There are also over 35,000 independent auto dealers across the country, and many of those dealers communicate with each other through the network as a means of support.
The buy here, pay here business is also under pressure. The cost of vehicles for buy here, pay here dealers have gone up considerably, creating a tighter money market and restricting how many cars they can sell. Disruptors like Carvana and Vroom are also taking sizeable shares of the pre-owned market despite title and registration compliance failures. Since Carvana acquired ADESA, there has been much migration of fleet accounts to and from ADESA. In McCloskey’s opinion, Carvana’s challenge now becomes supply.
In response, NIADA dealer members are working diligently to improve their reputations, the quality of their products, and digital marketing efforts. From McCloskey’s perspective, the image of independent auto dealers has significantly improved over the past two to three years.
“The stronger the competition gets, the independent dealers get that much stronger as well,” says McCloskey.
This June 20-23, NIADA will host its annual Convention & Expo at the MGM Grand in Las Vegas, Nevada. This year’s keynote speaker is Jon Taffer, an American entrepreneur, New York Times best-seller, and host of the reality TV series Bar Rescue. The NIADA Convention & Expo is an excellent opportunity to meet other independent auto dealers, industry experts, analysts, and thought leaders. NIADA’s subject matter experts will tackle the latest trends, best practices, legislative issues, and strategies that independent auto dealers need to understand today.
Click here to reserve your spot now!
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