Used Car Dealers
Description
Companies in this industry sell a variety of used vehicles including passenger cars, light trucks, SUVs, and passenger and cargo vans. Major companies include CarMax, Car-Mart, and DriveTime (all based in the US), as well as Cargiant (the UK), Nextage (Japan), and Porr Equipment Services (Austria).
Global used car market is expected to reach about $860 billion in 2028, according to Technavio. Leading countries for car sales are China, the US, Japan, India, and Germany, according to Road Genius.
The US used car dealer industry includes about 25,000 dealers with combined annual revenue of about $100 billion. Auction houses and wholesalers that buy and sell used vehicles are not included in this industry. Dealers that sell both new and used vehicles are covered in a separate industry profile.
COMPETITIVE LANDSCAPE
Demand is driven by consumer spending and interest rates. The profitability of individual companies depends on high inventory turnover, exceptional customer service, and effective marketing. Large companies provide a wider variety of vehicles. Small companies can offer a boutique car-buying experience and provide more individualized customer service. The US industry is fragmented: the top 50 companies account for about 30% of revenue.
Used car dealers compete with the used car divisions of new car dealers and with private sellers. Dealers that offer repair and maintenance services compete with a variety of independent shops and chain outlets.
PRODUCTS, OPERATIONS & TECHNOLOGY
Sales of used passenger cars (about 65%), used vans and minivans (about 25%), and new and used automobiles (about 5%) are the primary source of revenue; some dealers also provide financing and routine maintenance and repair services. The used car market can be segmented by price or type. Some dealers sell a mix of used mass market and luxury cars.
Dealers acquire used vehicles from a variety of sources, including auctions, trade-ins, other dealers, leasing companies, and rental companies. Companies typically have limited influence over the colors and features of cars received.
Used car dealers consider several factors such as a car's age, mileage, and condition when determining its value. Used vehicles may need reconditioning prior to sale.
The used car dealer business is seasonal: traffic increases in the spring and summer months beginning with tax refund season. Dealerships that build inventories in the fall and winter are better positioned for sales peaks. Rising used car supply typically follows surges in new car sales by a few years.
Global used car market is expected to reach about $860 billion in 2028, according to Technavio. Leading countries for car sales are China, the US, Japan, India, and Germany, according to Road Genius.
The US used car dealer industry includes about 25,000 dealers with combined annual revenue of about $100 billion. Auction houses and wholesalers that buy and sell used vehicles are not included in this industry. Dealers that sell both new and used vehicles are covered in a separate industry profile.
COMPETITIVE LANDSCAPE
Demand is driven by consumer spending and interest rates. The profitability of individual companies depends on high inventory turnover, exceptional customer service, and effective marketing. Large companies provide a wider variety of vehicles. Small companies can offer a boutique car-buying experience and provide more individualized customer service. The US industry is fragmented: the top 50 companies account for about 30% of revenue.
Used car dealers compete with the used car divisions of new car dealers and with private sellers. Dealers that offer repair and maintenance services compete with a variety of independent shops and chain outlets.
PRODUCTS, OPERATIONS & TECHNOLOGY
Sales of used passenger cars (about 65%), used vans and minivans (about 25%), and new and used automobiles (about 5%) are the primary source of revenue; some dealers also provide financing and routine maintenance and repair services. The used car market can be segmented by price or type. Some dealers sell a mix of used mass market and luxury cars.
Dealers acquire used vehicles from a variety of sources, including auctions, trade-ins, other dealers, leasing companies, and rental companies. Companies typically have limited influence over the colors and features of cars received.
Used car dealers consider several factors such as a car's age, mileage, and condition when determining its value. Used vehicles may need reconditioning prior to sale.
The used car dealer business is seasonal: traffic increases in the spring and summer months beginning with tax refund season. Dealerships that build inventories in the fall and winter are better positioned for sales peaks. Rising used car supply typically follows surges in new car sales by a few years.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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