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Understanding Today’s Used Car Market
The used car market is shifting, and dealers who treat today like yesterday are setting themselves up for trouble. In a recent episode of the LotTalk Podcast, hosts Chris Keene and John Anderson sat down with Lotpop founder and CEO Jasen Rice to break down what’s happening in the industry right now—and more importantly, what used car managers can do to stay ahead.
Rice, who has spent over a decade analyzing weekly dealer performance data, gave clear-eyed insights on shopper activity, inventory management, and how pricing mistakes compound quickly in a down market. The message was straightforward: staying profitable isn’t about luck, it’s about discipline and focus.
Seasonal Trends: The Fall Slowdown
Every fall, shopper demand dips. Families are busy with back-to-school schedules, tax refund money has already been spent, and buyers hold off as the holidays approach. This isn’t new—but what matters is how dealers respond.
Lotpop tracks a “shopper index” through Google, and this fall it shows a 4% drop in shopper activity. That may sound small, but it compounds. Retail sales started slowing four weeks ago, and now wholesale activity is following behind. In short, fewer customers are in the market, and dealers who keep buying and pricing cars the way they did in July and August risk getting stuck with aging inventory .
Pricing Discipline in a Moving Market
Here’s where many stores go wrong: they assume a 15-day-old car is safe. Rice warned that a 15-day-old car in September will look like a 45-day-old car by October, as the market softens. That means today’s “fresh” inventory is tomorrow’s aging headache if you don’t stay aggressive.
Lotpop’s data shows dealers’ “price to market” ratios climbing—not because managers are raising prices, but because the market is moving underneath them. Vehicles that were priced at 99% of market a few weeks ago now sit at 101% simply because the competitive set dropped. Dealers are being forced to cut $500 here, $1,000 there, just to stay relevant .
The key takeaway? Don’t wait. Adjust early, especially on units likely to age.
Bucket Management: The First 30 Days Matter Most
Rice emphasized that profit lives in the first 30 days of inventory life. Studies prove that by day 30, most vehicles are already losing money. That’s why bucket management—tracking how many units you have in each age bracket and how quickly they’re selling—is critical.
If your 31–45-day bucket holds 20 cars but you’ve only sold 5 in the past two weeks, you’re pacing to sell 10 out of 20. That means the other half will “bleed through” into the 46–60-day bucket, where profitability disappears. The solution is to attack problem cars before they age out. Adjust pricing, merchandising, or lead activity aggressively to keep cars moving .
Volume vs. Gross: You Don’t Have to Choose
One of the biggest myths in used car operations is that you have to choose between selling more cars or making higher grosses. According to Anderson, Lotpop’s approach showed him both are possible. By aligning stocking with what actually sells, dealerships can avoid aged cars dragging down margins. As Rice put it: “If everyone had a hard 60-day policy, everyone’s grosses would go up” .
Inventory Myths: Is There Really a Shortage?
You’ve probably read headlines claiming there’s a used car shortage. Rice’s data says otherwise. Shopper activity is actually down 10–15% compared to a few years ago, while overall vehicle counts remain steady. The issue isn’t supply—it’s appeal. Many of today’s vehicles are older, higher-mileage, and less attractive to buyers.
The real shortage is in the right cars at the right price points. Dealers who understand regional patterns and buy strategically will be positioned to win .
Why Leasing Should Be Back in Your Playbook
One solution Rice and the hosts emphasized is leasing. Leasing not only keeps payments attractive for buyers but also guarantees dealers a steady flow of late-model, lower-mileage trades three years down the line. A consistent leasing strategy compounds over time, creating a built-in pipeline of quality used vehicles while also boosting service retention.
As Rice said, the best time to start was years ago. The second-best time is today .
Lead Management: Before You Drop the Price, Work the Leads
Another overlooked area is lead follow-up. Rice noted that many dealers slash prices on cars with multiple untouched leads. If a unit has three active leads but no recent contact attempts, that’s not a car problem or a pricing problem—it’s a process problem.
Instead of immediately cutting $500, first ensure your BDC or sales team is actively working every lead tied to in-stock inventory. Increasing daily contact attempts can boost sales without eroding margin .
Action Steps for Dealers
Here are some immediate takeaways from the conversation:
- Anticipate the slowdown: Don’t buy or price as if it’s still July.
- Manage buckets aggressively: Attack cars in the 31–45-day range before they bleed into aging buckets.
- Adjust pricing early: Don’t wait until a car is 60 days old to get realistic.
- Use leasing strategically: Build your future used car pipeline while keeping today’s buyers happy.
- Work the leads: Before cutting price, check if your team has maximized every contact opportunity.
Final Word
The market is moving quickly, and “hope” is not a strategy. Dealers who act proactively—backing into desired price points, enforcing hard age policies, and holding their teams accountable for lead follow-up—will thrive even as demand softens.
As Rice put it: “You want to sell more cars? Talk to more people. Don’t just cut prices and call it a day.”
For managers looking to sharpen their skills, Lotpop offers free training resources for used car managers through their website. In a market where every decision counts, the right guidance can make all the difference.