In the fourth quarter of 2013, same-store used unit retail sales by the 7 publicly-traded dealership groups increased for the 18th consecutive quarter. Obviously, as this string has continued, the year-over-year comps have represented an increasingly high hurdle. Nevertheless, in each of the last three quarters, same-store unit sales rose at a double digit pace. And, with the benefit of acquisitions, total used unit retail sales rose to more than 1.2 million in 2013, an increase of 13%.
Yes, gross margins have continued to narrow, but quick inventory turns, strong F&I income, and increased operating efficiencies have more than offset that decline.
Last year’s favorable automotive retailing market was enjoyed by more than just the publicly-traded dealership groups. Indeed, many of the large privately-held dealer groups scored even bigger gains in their used operation in 2013. As we wrote in our annual Used Car Market Report, it was a great time to be a dealer – whether franchised, independent, Buy-Here Pay-Here, or wholesaler. In fact, if, as a dealer, you didn’t knock the cover off the ball in 2013 you might consider selling out while acquisition prices are high. The strong used vehicle retailing environment of 2013 will likely continue into 2014, but it won’t last forever.