Used car inventory shortages didn’t start yesterday and tariffs are just the latest challenge dealers face. But tools exist to manage this market.

Patrick Janes, associate vice president, vAuto, inventory solution, recently talked about how the last few years have created a hole in used car inventory supply. Jane said it wasn’t just the drop in new-car manufacturing with the pandemic and chip shortage, but also the loss of fleet and rental cars that weren’t delivered back then. Janes said he knows someone who works a rental car site at an airport and at one point, with the rental companies hanging on to cars, it was nothing to see a fleet of rentals with 70,000 to 80,000 miles on them. “That’s like 11.5 million units that weren’t delivered, just kind of sucked out of the ecosystem,” he said. 

The loss of feet/lease was a killer because those cars were the core of dealers’ certified pre-owned (CPO) business.  “That’s the drought that I see,” Janes said. “I was in retail a number of years and it was like; we have our trades and if we need to fill a few holes we’d just go to auction and raise our hand. “It’s not that easy anymore.”

Janes said in 2019-2020 – and this was fairly consistent even before that – 50% to 51% of the vehicles running in auction lanes were the 0- to 3-year-old model cars.

Last year, that figure was 36% and it’s going to be worse this year, he said. “They vanished,” Janes said. “I mean, they’re there, but people are driving them. You have to pry them away from their hands.” Janes ran vAuto’s Stockwave for several years, which offers access to over 300 marketplaces and a live market view of used vehicles and pricing. “We really made an aggressive effort to get in front of independents, because they don’t spend their money on a full-blown inventory management software system,” he said.

At $595 per month, Stockwave is something that offers an option for independents. Janes said the traveled to dealer conventions and conferences to push that product and was able to penetrate that market. “I give a lot of kudos to the independent dealers,” Janes said. “They realized they had to find other channels and went after private party listings and (posting) ‘We Buy Cars’ at their dealerships. They hit it as hard as anyone in that ecosystem. I was impressed.”

Add in the tariff issues and there is more stress, so managing and acquiring inventory is even more important. Janes said vAuto also has a vehicle inventory management system – Conquest – with about 6,400 rooftops on that, a tool that’s been around for about a decade. “We’re doing some creative things with that,” he said. “We decided we’re going to take every car that’s in our system under every rooftop on Conquest and were going to tag every car that is “pre-tariff.’” This would allow dealers to know those cars don’t have tariffs on the them.

The Conquest system offers marketing tools to allow dealers to create campaigns differentiating cars that were pre-tariff and cars after tariffs to create demand, Janes said. “Right now, we’re trying to be very focused on acquisitions,” he said. “How do we help the dealer get more cars. I don’t think they’re looking for fluffy new gadgets that don’t get more cars in inventory.” Ford and Stellantis both offered employee pricing as a marketing play to draw customers. 

President Trump at press time was expected to make a tariff announcement Tuesday, April 29, in Michigan.