Fixed Ops Journal - April 2022 - F12

FIXED OPS JOURNAL
HANDS ON
WNEW VALUE IN USED CARS
W
rtruett@crain.com
elcome to spring 2022, an upside-down
world where newvehicle
dealers are so desperate
for used-car inventory they are
taking trade-in vehicles with mileages deep
into the six fi gures and sending them to the
front line.
A scan of used-car inventories from Florida
to California shows many new-car dealers are
off ering vehicles with mileages of 175,000 or
more.
At Sun State Ford in Orlando, a 2006 Toyota
Tacoma with 204,000 miles barely made it out
of the service department before it was sold,
says Anthony Silvio, the store's used-car director.
Another recent sale: a 2013 Toyota Prius
with 180,000 miles.
" Before the pandemic and the shortage of
cars happened, anything over 150,000 miles
we really didn't touch. But the way the market
is made us stretch a little more, " Silvio says.
Th ose super-high-mileage vehicles, he says,
went directly to auction before the pandemic
and new-car shortages drove up prices of
used vehicles . From the auction, they'd likely
land on a buy-here, pay-here lot.
But dealers have found that extra checks in
the service department on well-maintained,
high-mileage vehicles, along with more extensive
reconditioning work, can make a
high-mileage vehicle not only viable, but profitable.
All
systems go
LaFontaine Buick-GMC in Highland,
Mich., west of Detroit, recently put a 2013
GMC Acadia with 270,407 miles under its
wheels on the store's front line after technicians
checked every critical system . Th ey
tested the engine's compression and oil pressure,
inspected the transmission and tested
the vehicle's electrical, safety, suspension
and emissions systems. Th ey made sure the
expensive catalytic converter was in serviceable
condition.
Any major defects rendering the GMC unsafe
or unreliable would have immediately
routed it to the auction, said Gordy Koenig ,
one of the store's used-vehicle directors .
Th e Acadia's 3.6-liter V-6 engine starts right
up and idles smoothly - no knocks, ticks or
smoke. Th e large crossover's metallic black
PAGE 12 APRIL 2022
RICHARD TRUETT
"
Experts say high-mileage vehicles on the
" There is a lot of money
to be made before the
car ever retails. And
there is also great
money to be made
when the car retails. "
Mike Boyd, founder, iRecon
paint still shines, despite nearly a decade on
Michigan's potholed and winter-salted roads.
Th ere's no rust on the undercarriage. Th e exterior
brightwork and wheels don't show abnormal
wear. Th e infotainment screen is clear
and bright, and the back up camera works as it
should. Th e owner's manual, still wrapped in
plastic, is in the glove box. Only the driver's
seat gives away the high mileage. Th e foam on
the lower cushion has lost its springiness, and
you just kind of sink into the seat.
Th e Car Fax report details the one-owner
crossover averaged 32,000 miles per year, but
the vehicle received regular service and frequent
oil changes. Th e asking price: $9,650.
front line at new-car dealerships is not just a
temporary trend that will fade once the newand
used-vehicle markets stabilize .
" I think there will be a new normal where
[dealers] carry more older vehicles. Th ey are
seeing that they can do this correctly, " says
Mike Boyd, founder of iRecon, part of vAuto, a
unit of Cox Automotive. " Th ere is a lot of money
to be made before the car ever retails. And
there is also great money to be made when the
car retails. "
Changing market
Two things are changing the used-car market.
First, today's vehicles last much longer
than 100,000 miles; used-car customers know
it and are getting more comfortable buying
well-maintained, high-mileage vehicles.
Second, the price of used vehicles with
six-fi gure mileage makes them aff ordable to
buyers priced out of the market for most 2and
3-year-old used cars. Cox Automotive data
shows used-vehicle prices were 37 percent
higher in January 2022 than January 2021.
Says Boyd: " Today's cars are so much better
engineered and put together. It comes down
to the pedigree. If they are taken care of and
La Fontaine Buick-GMC said the ad
for this GMC Acadia on its website
had a 53 percent click-through rate,
signaling strong customer interest.
ith proper reconditioning, high-mileage vehicles turn into sales for retailers
RICHARD TRUETT
"
Fixed Ops Journal - April 2022

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