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Most dealers wait 90 days to wholesale vehicles, survey says

November 18, 2010

Three months is the most popular cutoff point for dealerships to wholesale used vehicles, a period slightly longer than the national average, according to an informal Web survey in October.

 

New-car dealers typically focus on late-model used cars and quickly wholesale trade-ins that are older, the wrong brand or in poor condition, the National Automobile Dealers Association said.

 

Most franchised dealers also employ strict inventory guidelines that demand used units be wholesaled if unsold after a set period of time on the retail lot—usually 45 or 60 days. But 38 percent of respondents to the recent poll said they wait 90 days. The next largest group, 35 percent, wholesale used vehicles after 60 days, more in line with the NADA’s statistics.

 

The average franchised dealer will wholesale four used vehicles for every six that are retailed. The majority of those sales are made directly to other dealers or through wholesalers, the NADA’s 2006 annual dealer survey found.

 

A majority of respondents—59 percent—say they sell that inventory at auction, followed by 29 percent who sell directly to wholesalers and 13 percent who typically sell to other dealers.

 

Dealers remarketed 4.75 million vehicles through auctions in 2005, said the NADA, which added that dealers choose to sell cars through an auction or directly to a wholesaler or other dealer depending on many factors, including the value and desirability of the vehicle, distance to the nearest auction, the number of cars to be sold, and where the dealer thinks the best selling price can be found.

When do you wholesale used vehicles?

    45 days                               11%

    60 days                               35%

    75 days                             &​nbsp; 16%

    90 days                               38%

How do you sell that inventory?

    At auction                         ​; 59%

    Directly to wholesaler      29%

    Other dealers                    13%

Published by Dealer Communications

 

 

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