3 Ways to Increase Your
Pre-Owned Car Sales Profitability
Improving your dealership's pre-owned car sales profitability requires understanding a few key
facts on what's happening to used car sales and profit margin across the country.
According to NADA's annual Dealership Financial Profile
reports, in 2010, the average dealer
sold 528 used vehicles. In 2015, they sold 677. In 2019, it was 735. Dealers are also selling
used cars for more money: According to NADA, the average sale price of a used car increased
21% over the past decade, from $16,480 in 2010 to $21,103 today.
However, even with more cars being sold and transaction prices steadily increasing, dealer
profit on used cars has remained relatively flat. Between 2010 and today, the average gross
profit on a used car only grew 6%, from $2,236 to $2,374.
In this whitepaper, we discuss three ways to increase your pre-owned sales profitability
and reduce overhead costs by unlocking new sales opportunities, including:
• Centralizing your customer and inventory data
• Simplifying your marketing and sales process
• Focusing on improving net profits
Centralize Your Data
COVID-19 disruptions are driving changes in consumer buying
habits with the combination of economic uncertainty and new
vehicle supply disruptions pushing many shoppers to consider
pre-owned options in their next purchase cycle.
By mapping your pre-owned and new vehicle inventories from
the same platform, you're able to efficiently match customers
to the vehicle they're most likely to purchase, new or used.
Price isn't the only factor driving purchasing decisions. Ensure
your dealership's customer insights can also be collected and
analyzed in a single environment by integrating data from your
CMS and DMS so you can tailor your customer outreach.
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If dealers are selling 39% more used cars than they were a decade
ago and the average transaction price is up 21% but profits are not
keeping pace, then what can dealers do to reverse the trend?
64%
OF BUYERS
SAID THEY
WOULD
CONSIDER PRE-OWNED OPTIONS
WHILE SHOPPING FOR A VEHICLE
Cox Automotive, 2019 Car Buyer Journey
