You may have heard these numbers by now, but just in case you didn’t I will share them with you. Last year there were 12.7 million new cars and trucks sold in this country. That’s a number you have probably read a lot about. A number that you’ve not heard much about is the 38.7 million used that were sold.

Both numbers are up from 2010. Roughly one million more new and two million more used were sold in 2011 than in 2010. Here’s the breakdown of the 38.7 M used.
New Car Dealers: 13.8 M
Independent Dealers: 13.7 M
Private Sales: 11.2 M

New car dealers and used car dealers were almost a split coming in around 36% each of the total market and private sales at about 28%.

Did you sell more used in 2011 than you did in 2010? If you didn’t, shame on you. With 2 million more used sold last year, your used car sales should have also increased.

Let’s assume you did sell more used in 2011 than 2010, the next question is did you get more than your fair share. I can’t define "more than your fair share." Only you can do that by taking a look at your total used car market.

There are a lot fewer new car dealers chasing the used car numbers than there were back in 2008, 2009. There are also fewer used car dealers competing for the used segment. In the big picture there are fewer dealers and more used cars being sold. If you’re not kicking butt in used you really need to have a chat with yourself.

I’m amazed at the 13.7 million used that the independent dealers sold. Can we agree that in one way or another most of their inventory comes from a new car dealer? They get most of their inventory from a new car dealer who sells them as a perceived wholesale piece either directly (I say perceived because a lot of them could have been a retail piece) or at an auction. So one way or another a large percentage of their inventory comes from a new car dealer. Talk about insanity!

Why do you let that happen? Oh, sure some of it is junk and you don’t want to deal with it. True story. But more often than not you have become prejudiced against certain vehicles you don’t want to mess with.

It’s not unusual for you to trade a car in and it might be the number one seller in the market. You keep it for 60 days, don’t retail it, dump it in the wholesale market, and lose $2000. So the next time that car comes to the front door you immediately have an attitude about it. You either don’t step up or if you do trade for it you wholesale it because you don’t want anymore of that "action." The truth of the matter is that the reason you didn’t retail it the first time was because you didn’t market it right. Had you priced it right on day one you wouldn’t have it on day 61.

Another very important piece of the equation is that you keep trading in those $5,000 to $10,000 cars and every time you take them into the shop they try to knock your head off with the repairs. You get tired of having your head knocked off, so you wholesale them.

But, wait, wait…you still need inventory so you go to the auction or ring up the Enterprise guy and you buy some late, late model stuff that you don’t have to spend a lot of money on. That’s what I call being in the NEWSCAR business. That’s when the average cost of your used cars keeps creeping up and up and gets real close to your new. Then you wake up one day with an average cost per unit in stock around $18,000 and you wonder why you’re not selling any used cars.

If you’re going to get more than your fair share of the used car market then you have to play unfair. Playing unfair means taking advantage of the massive amount of information available to you from vAuto, Auto Trader and Auto Count USA. You will not win the game unless you become a student of the game. That’s all I’m gonna say. Tommy Gibbs