1. Vehicle Prices Continue to Play a Pivotal Role
It looks like used car prices may have reached their peak in 2022 and that means that car buyers who’ve been putting off purchasing a used vehicle will be more inclined to do so. Used car dealers shouldn’t be surprised to see a potential influx of car buyers who are finally ready to purchase a vehicle. They could also see an increase in demand from traditional new car buyers who’re looking to purchase a more economical vehicle due to financial challenges brought on by the economy.

2. Fuel Prices Could Drive Consumer Demand
While gas prices continue to fluctuate, consumers who are looking to pay less at the pump may be in the market for a more economical vehicle. Independent dealers should also keep their eye on hybrid and electric vehicles as more auctions have invested in charging stations and added EV battery health scores to their condition reports. Used electric vehicles that provide information on battery health receive more views and bids at auction than those that don’t have one.

3. Utilize a Multi-Channel Approach for Inventory
Independent dealers need to make sure they’re not relying on just one or two channels to source their inventory from to ensure they’re getting the best price. They can review their dealership floor plan to ensure their inventory is coming from multiple sources including auctions, wholesale, trade-ins and online marketplaces. Trade-ins or buying directly from consumers will provide dealers with the most revenue since they won’t have things like transportation costs eating away at their margins.

4. Research Can Prevent Revenue Loss
It’s going to be more important than ever for dealers to do their research before purchasing a vehicle whether it’s at an auction or online to ensure they’re not losing money after factoring in things like refurbishment costs. With fluctuating prices, it’s easy for extra expenses to quickly eat away at profits so dealers need to make sure that they know what the total cost of buying a vehicle is before purchasing it.

5. A Service Department Could Provide Extra Cash
As customers continue to find ways to reduce spending to combat inflation, they may hold on to their vehicles longer or be willing to purchase vehicles with higher mileage to save money. Independent dealers who have a service department can take advantage of this trend by offering customers maintenance services or car repairs to generate additional revenue if they have a service department. Dealers who have a floorplan can use the additional cash flow it provides to create or expand on these types of services.