1. SOURCES OF USED CAR INVENTORY FOR DEALERS
With used supply drying up amid the stiff competition for limited resources, dealers often
have to pull out all the stops to find enough used cars for their lots.
For instance, small independent dealerships, selling an average of zero–100 units annually,
find close to 27 percent of their inventory through purchases off the street, according to
CNW Research.
“Where do independent dealers get their inventory now that franchised dealers have pushed
hard into auctions and other sources of cars and trucks? Depending on the size of the used
dealership, the answer is ‘wherever possible,’” said CNW president Art Spinella.
CNW broke independents down by six size categories — zero–100 annual sales, 100–250
annual sales, 251–400 annual sales, 401–700 annual sales, 701-100 annual sales and 1001-
plus annual sales — and then shared the most popular used sourcing techniques for each
group.
For the zero–100 group, the No. 1 inventory source was the auction (32.56 percent) followed
by sourcing off the street (26.72 percent). Trade-ins were third at 21.83 percent.
Independents selling 100 to 250 vehicles per year most often turn to auctions to find inventory
at 46.31 percent of the time. Trade-ins (25.89 percent) were second for this group, followed by off-
the-street sourcing (13.64 percent).
For the 251-400 sales per year crowd, auctions were most popular (53.96 percent), with
trade-ins (21.46 percent) second and off-the-street sourcing in third (10.46 percent).
Of what Spinella called the “typical dealership" — independents selling 401–700 units each
year — the auction was overwhelmingly the top choice at 54.83 percent. The next closest
option was the trade-in route (17.08 percent) with every other avenue in the single digits.
Dealers with 700–1,000 and 1,001-plus yearly sales saw similar results, with auctions
commanding the lion’s share for both groups and trade-ins coming in second.