New AutoLoop Study Explains Unexpected Impact of Used Car Sales on Auto Dealers’ Bottom Line

Press Releases | March 20, 2018


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New report summarizes findings from over 250 franchise auto dealerships

CLEARWATER, FL – AutoLoop LLC, the leading provider of auto-industry marketing, sales, and service solutions, has released a new report on changing trends in used-vehicle profitability. The Impact of Used Car Sales on Your Service Drive summarizes the company’s analysis of used-vehicle sales data from more than 250 franchised dealerships.

The report finds that in 2017, used-vehicle sales accounted for 40.7 percent of overall vehicle sales at franchised auto dealerships, up from 40.2 percent in 2016. However, the extra gross margin gained by selling used vehicles compared to new vehicles dropped 21 percent.

“This is both good and bad news for auto dealers,” said Doug Van Sach, AutoLoop’s Vice President of Analytics and Data Services. “The good news is we’re seeing increased opportunities to sell more vehicles. The bad news is that the gap between new and used profit is shrinking as more off-lease vehicles flood the market.”

“If this trend continues,” Van Sach explained, “dealers will see their service business gradually erode as fewer customers make the journey from the showroom to the service drive.”

Used owners are 50 percent less likely to visit the dealer for maintenance and repairs, and they are 25 percent less likely to return to a dealer to buy another car. Because of this, dealers who rely solely on a manufacturer’s retention marketing program are particularly vulnerable to losing used-vehicle service business, as many of these programs ignore used vehicle owners.

One possible solution? Van Sach suggests dealers develop a separate customer retention and marketing program for their used vehicle customers. “Make used customers aware of your service value proposition, and offer them targeted service specials based on their unique needs.”

For more information about AutoLoop’s study, contact or stop by Booth 5038C at the 2018 NADA show in Las Vegas, NV, from March 23-25, for one-on-one live demos. To schedule an appointment, click here.

About AutoLoop:

Since 2005, AutoLoop has helped automotive dealerships nationwide increase sales, improve client retention, and achieve overall higher customer satisfaction ratings throughout the Sell, Service, Repeat cycle. With the AutoLoop Customer Engagement Suite—an all-encompassing platform that includes everything from CRM and automated messaging to equity mining, service scheduling, and more—AutoLoop is the industry’s first and only single-vendor, end-to-end marketing and engagement solution. An Inc. 500 company with nearly 50 million names in its database and over a billion individual communications initiated, AutoLoop is passionate about being America’s best customer retention partner for progressive dealerships.

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