The used vehicle market is under close scrutiny as it adjusts to changing consumer preferences and evolving inventory levels. What can dealers expect from the preowned segment in 2024, and how should they prepare to navigate the complexities of a shifting automotive landscape?
On this episode of Inside Automotive, host Jim Fitzpatrick is joined by Seth Rosen, used car director at Subaru of Jacksonville. With his boots-on-the-ground perspective, Rosen shares his insights into the latest trends and best practices defining the used vehicle market and how he expects conditions to develop throughout the remainder of 2024.
Key Takeaways
1. Rosen notes that February was a record-breaking sales month for preowned cars at Subaru of Jacksonville, although March has seen a slight cooldown. The shift underscores the frequent demand fluctuations the used vehicle market has observed over the last year.
2. Given the unpredictable nature of the used vehicle market, inventory strategies that focus on maintaining a balanced days’ supply of cars are more crucial than ever. Rosen suggests that a slightly quicker turnover rate paired with aggressive pricing might be more beneficial for dealers in the current automotive landscape.
3. Auctions and trade-ins are still primary sources for acquiring used vehicles for the dealership. However, Rosen emphasizes the importance of diversifying acquisition channels to strengthen inventory volume.
4. Affordability is a critical concern for both dealers and car buyers. Rosen explains that working with Subaru has given his dealership a slight edge over the competition due to the automaker’s comparatively cheaper new car prices. This has influenced the company’s pricing strategy for the used vehicle market.
5. Rosen notes that the used vehicle market still faces challenges and uncertainties, including external factors such as the economy and the upcoming presidential election. Despite these challenges, he expresses optimism for 2024, noting that dealers who adapt to market conditions and focus on sales volume over profit margins will continue to succeed throughout the year regardless of whatever hurdles they may face.
"Typically, the older the car is and the higher the miles, it probably gets more directed towards accreditation [and] credit unions. They're a little more open in that regard with an older car with higher miles, so that's kind of the direction we go, but we will try to retail anything that passes through the shop safely." — Seth Rosen
