For 2Q, Rethink Your Used Inventory Strategy  

Whatever the prevailing used car market is the day you read this, one foundational truth always remains true: Buyers seek affordability and reliability, whatever the age of the used vehicle they buy from your dealership. 

 If you haven’t recently given fresh thought to your car inventory strategy, this would be a suitable time as we roll into late spring and early summer. Every new market should prompt new considerations on how to obtain and inventory used cars smarter.  

 Inventory strategist Ed French of AutoProfit Group recommends that dealers be more aggressive in intention and volume of activity related to vehicle acquisitions. Primarily, this can be done via appraisals and private party purchases, and by buying a broader spectrum of vehicle makes and model years. 

 For the second quarter, French told me, because three-year-old car models are in short supply, those acquisition prices will be up. This is especially true for the spring, with tariff uncertainty stirring inventory concerns. He advised dealers against stocking up now to hedge these factors and instead buying older model vehicles than usual, but that proper used car reconditioning will still yield attractive margins.  

 “And be more transparent in the marketing of this inventory than ever before,” he said. “You have to aggressively demonstrate that these vehicles are good cars and a good value.” 

 You have access to a wide range of data sources to help you achieve the optimal balance of make, model, and age for your dealership and market, including prices, interest trends, and prevailing consumer confidence. This data helps you paint a picture of what these factors look like for your dealership.  

 Considering these observations, and factor in these disciplines: 

• Smart ROI: Set aside any margin-first mindset and flip the script: Most car dealers don’t lose money because of market conditions. They lose money and margin from making stocking decisions using incomplete or incorrect data. How might inventory decisions improve if you knew precisely what shoppers of your dealership were looking for and buying within the last week, not last month?
• Guesswork Loses: Make every detail count to maximize sales opportunities and margin – and the best way I know to do that is to know most every feature, option, and other highlight about the car you’re selling – and promote them aggressively to your market. 
• Time Kills: Speed isn’t optional anymore. Every extra day a vehicle remains in recon or merchandising costs money, in lost sales opportunity, aging, and margin compression. Data-driven automation gets cars retail-ready quickly. The sweet spot is an acquisition-to-retail-ready speed of three to five days. 
• Uncompromised Transparency. Dealerships that embrace full transparency convert more buyers more quickly. 

 “Consumers demand transparency about the used cars they shop on the dealer’s website,” French said. “The dealer must be completely transparent about the car’s DNA – where was it sourced, is it a fair value, comparably, what work was done to get it ready to resale, and how does the dealer stand behind the car once sold. 

 When this level of transparency is available online through the dealership website, the dealer provides credible evidence to such questions. The standard Vehicle Display Page (VDP) accompanying website inventory displays provide basic vehicle details, but for an increasing number of dealers—and consumers—this level of transparency leaves much to be desired. 

 For example, online, a Digital Vehicle Portfolio (DVP) offers a comprehensive and detailed vehicle history, including service records, inspection reports, window stickers, warranty information, and accident history.  

 A well-documented car means no surprises. Customers understand why the vehicle is priced the way it is, whether it’s a three-year-old model or one with 5 to 10 years of mileage.