Used car dealers have faced numerous challenges over the last three years as they have navigated a fluctuating industry landscape and considerable economic headwinds caused by the COVID pandemic. To form the proper strategies for next year, retailers will need to examine the emerging trends affecting the preowned segment.
On this episode of Inside Automotive, host Jim Fitzpatrick is joined by David Simches, group used car director at Crown Automotive Group. A veteran of the retail automotive sector, Simches has spent years helping businesses manage inventory, acquisition, and sales operations in the preowned segment. His expertise has helped Crown Automotive Group achieve incredible success throughout multiple markets. Now, Simches discusses the key trends and strategies retailers should know to prepare their storefronts for 2024.
1. Used car demand has softened in 2023. In response, preowned retailers have had to be more disciplined in their inventory management.
2. Simches prefers to buy from consumers rather than at auction. Used car dealers have numerous options to purchase inventory from their customers, with opportunities available across multiple departments.
3. The digital age has drastically increased the rate at which certain tasks can be done, leading consumers to have higher expectations for speed and efficiency when interacting with a business. To avoid losing customers, used vehicle dealers must be able to move quickly through the appraisal, acquisition, and sales process without sacrificing accuracy.
4. Very few of the used vehicles Simches stocks across his dealerships are electric. However, his storefronts are capable of flipping battery-powered cars quickly, thanks to proper merchandising and pricing.
5. To navigate the 2024 used car market, retailers will need to show more restraint when purchasing inventory and discipline when pursuing sales opportunities.
"Once we own the car, I'm not obligated to really any particular exit strategy via retail or wholesale. What we look at is, what is the best exit strategy for value." — David Simches