There is little to no debate that new vehicle sales in 2017 are sliding when compared to 2016, which peaked at 17.5 million. But this dip does not come as a surprise to dealers and industry analysts, and with the forecast hovering around 17 million, there is hardly need for alarm.
This does not mean however that you can be complacent. Your long-term strategy to grow market share is as crucial as ever right now, and your used car business is a sure bet for this strategy.
The supply of appealing used vehicles has increased substantially thanks to consistent strong sales since the recession, helping dealers build their inventories of used vehicles. A significant number of off-lease vehicles are returning to the market as low mileage, relatively-new used vehicles, and many dealers are willing to pay more for used vehicles to ensure they have an adequate supply
According to Cox Automotive in a recent article, more than 3.5 million leased vehicles are expected to return to the market in 2017. This is an increase over the 3 million that were reintroduced into the market in 2016. They estimate that 4.6 million will be introduced by 2020.
Dealers who want to avoid having that new car slump result in a bottom line slump should shift or keep their focus on used cars. Used car sales are on the rise, and with the right used vehicle acquisition strategy, you can lay the foundation for more profits in used cars, and more profitability overall.