COVID-19 Update: 8.9 Million People Plan to Use Their Stimulus Checks to Buy Cars

By Desiree Homer

Dealers Looking to Liquidate the Used Car Inventory

In a recent Dealer News Today podcast, Dale Pollak, the founder of vAuto and Executive Vice President of Cox Automotive, discusses the sense of urgency right now for dealers to move used vehicles off the lot. Dealers are reopening their revenue channels, as states begin to lift restrictions, and trying to find their way to engage the post-pandemic pool of car buyers. Pollak says dealers should strategize their efforts to move the hefty roster of used inventory, and targeting the stimulus check spending may be the way to go.

A Focus on Moving Used Inventory

The last several weeks have taken a toll on the value of used inventory. Some of your models may be 90+ days in aging. With the surge in lease returns and the rental car companies reducing their used fleets, due to the reduced consumer travel, the auction houses are full of inventory. Dealers today are focusing their efforts on cutting those losses by moving as many pre-owned vehicles as they can. Getting those models off the books, whether it be to the auction or quick, local sales can help put cash flow back into play. Dealers can then use that revenue to get back to the auctions to replenish their ideal used stock.

Finding the Tools to Help

If your books look like the values of countless dealers nationwide, you have used inventory well beyond your aging comfort zone. Liquidating those units may be your priority, and you have plenty of tools at your disposal to help. Of course, Dale Pollak’s, vAuto is one such tool, designed to help dealers to relevantly price and manage the stocking of models, based on the local market data. DealersLink and DealerSocket also offer great software products, loaded with features to help you accurately price and stock your lot.

Targeting Those Stimulus Recipients Now

Dave Cantin talks to Dale Pollak about predictions in a post-pandemic landscape. And while there are too many unknowns to really nail down a crystal ball outline, one thing is certain. There is an influx of car buyers right now, and sales are showing a slight surge. But Pollak warns that increased buying now, despite much of the nation’s continued virus mitigation efforts, may not be a sign of that originally predicted, v-shaped recovery model. Instead, he suggests buyers are making use of those government relief payments. It signals a real-time opportunity for dealers to get out from under those aging used models and lease returns. When used vehicle values are down almost 12%, and some data shows 8.9 million people are using their stimulus checks to buy cars, it leaves little question as to what dealers should be doing right now.

The most substantial piece of advice to take away from this podcast conversation is to liquidate the used inventory immediately. Now is the best time to purge those aging units, by wholesale or otherwise, and get the values back in check on the books. The uncertainty of consumer confidence, the economy, and politics are unknown and uncontrollable. However, taking advantage of those quick market sales now can help position your dealership to weather the post-pandemic effects yet to come.