Pub. 1 2019-2020 Issue 4

http://wvcar.com 26 WVADA A look at the raw sales numbers for the first half of the year might be enough to discourage almost anyone in the business of selling cars and trucks, but there are signs things are changing for the bet - ter, and that means opportunity. That opportunity is knocking on the business’s used car side, but it will only pay off if managed correctly. In a typical year, U.S. consumers buy about 17 million new ve - hicles and around 20 million used vehicles from dealerships. But, we’re on a roller coaster ride that has taken us from steep sales declines early in the pandemic to soaring levels of used car sales at the start of summer. According to Cox Automo - tive’s market summary released on July 13, the annualized re - tail selling rate for used vehicles was about 18.9 million, down from 21 million last year but up fromMay’s 16.7 million. Those wild swings make it almost impossible to predict where we’ll be by the end of 2020. We know that used vehicles commanded higher prices early this summer. Consumers are finding sparse choices at new ve - hicle lots because automakers laid on generous incentives in April, sparking a temporary spike in sales, leaving little inven - tory and limiting options. When you run low on new cars, the focus turns to used cars. Late-model used vehicles — especially popular pickup trucks, SUVs and crossovers — are in high demand, but in short sup - ply, driving up wholesale prices. Right now, wholesale prices are approaching retail prices. What’s important now is for dealers to move into the next few months very carefully in the face of rapidly changing market conditions. That starts with smart inventory management. Right-size inventory Here are some ways to help manage inventory effectively: • Use discipline when purchasing vehicles to avoid being stuck with a significant supply of aging inventory when the market slows. • Consider strategies to help promote the sale of the vehicle in the first 30 days to address aging before it occurs, such as shaving time off the vehicle reconditioning process. • Keep a close eye on market trends to make sure invento - ry levels are in line with where the market is headed as op - posed to where it has been. Look beyond auctions Looking beyond auctions for inventory is a smart way to help maximize resources. • Perfect your ability to buy off the streets, from the service lane and trades. • Consider keeping and retail selling some of the older, high - er-mileage units that you previously wholesaled for great low price-tag options. Smart Used Car Management Can Help Boost Profts During the Pandemic By Nick Jackson, manager — Dealer Training, Ally Academy