After starving for inventory during the Great Recession, automobile dealers have turned to trade-ins as a reliable profit center, reports Karen Jones in the current edition of GreenLight Remarketing magazine.
“Dealers love trade-ins,” says Ricky Beggs, vice president and managing editor of Black Book USA, in Jones’ story. “It’s another piece of inventory they have an opportunity to recondition, remarket and create a profit for their store.”
As new car sales continue their climb back toward pre-recession levels, trade-ins are coming back in higher numbers with greater value, Jones writes in her article, “Trading Up.”
“Because most cars on the road are more reliable and dependable than in the past, their value as trade-ins has increased. This is particularly true of domestic manufacturers,” says Larry Dixon, a senior automotive analyst at NADA in Jones’ story.
“Cars are holding up better – most manufacturers producing a better product,” says Patrick Primm, partner of Cascade Auto Group in Cuyahoga Falls, Ohio. “On the sales side, high-mileage cars we used to wholesale can now be retailed to clients without worrying about poor customer satisfaction.”
“A dealer can make a profit on nearly any trade-in today,” Richard Arca at Edmunds told Jones.
Still, despite generally good news for the auto industry, industrywide used-vehicle sales fell to 9.7 million units in the first quarter of this year, down 6 percent from the first quarter of last year, according to Edmunds.com’s Used Market Quarterly Report.
Jones’ story and others – Manheim Simulcast on Mobile, Risky Business (trade-ins) and the CPO Boom – appear in GreenLight Remarketing online at Santander’s GreenLight blog.
And see our GreenLight Remarketing video magazine here.
“GreenLight Remarketing – Driving Growth for the Remarketing Professional,” is published by Royal Media Group of New York, N.Y., for Santander Consumer USA.