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Old 03-31-2014, 12:17 PM   #3
XDCX
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Join Date: Nov 2007
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Thanks for creating the thread - it's a really interesting topic.

We've had other threads on the forum that have discussed some of the challenges that small/rural new car stores are feeling and have questioned what their future holds. The consensus seemed to be that while it is much harder to make a small/rural store viable it can still work as long as the OEM doesn't use two-tier pricing or facility/equipment/training demands to drive smaller dealers out of business.

Concerning the independent used car stores, I have mixed thoughts.

I think it will be an uphill battle for the independent used car dealer who tries to compete by filling his/her lot with the same type of cars that are typically stocked by new car dealers or corporate used car operations like CARMAX. To your point, new car dealers have an advantage because they get some great used cars via trade-ins and corporate used car operations like CARMAX have an advantage in my opinion because they can use their size to recondition vehicles for a lower cost and to find and capitalize on regional pricing differences at the wholesale auctions.

That said, I think the Buy Here/Pay Here market will continue to grow and there are huge profits available for dealers who can control their receivables. It's not a business that every car dealer might want to be in but I still think there's money to be made here. (I'm also somewhat intrigued by the concept of Lease Here/Pay Here.)

I also think there's a future for independent used car dealers who carve out their own niche in their market and establish their brand. In the Phoenix area I've watched a used car store called "Certified Benz and Beemer" grow their operation into a very successful store. Here's a link to their website - click here

I also think there's an opportunity for the independent used car dealer at the lower end of the market (sub $5,000) since most new car dealers and corporate used car operations don't cater to that market.

Last edited by XDCX; 03-31-2014 at 01:04 PM. Reason: Added word - "don't"
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