Used Car Dealers

Used Car Dealers

Brief Excerpt from Industry Overview Chapter:

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).

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.

PRODUCTS, OPERATIONS & TECHNOLOGY

Sales of used passenger cars (more than 65%), used vas, minivans, light-duty trucks, and buses (about 25%), and new and used automobiles (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.