Zeigler Auto Group of Kalamazoo, Michigan, has significantly improved its used-to-new ratio in 2021 above the 1-to-1 ratio it had posted for 2020, company president Aaron Zeigler said. Automotive News† Zeigler rose nine places to number 23, selling 29,604 used vehicles last year versus 20,920 in 2020 – a 42 percent increase.
The dramatically increasing inventory of used vehicles became a point of concentration for the group in May 2020, during the early days of the pandemic, Zeigler said. The focus lasted until 2021 with the chip shortage and the limited supply of new vehicles.
“Almost everything we knew about the used car industry has changed,” says Zeigler. “Historically, used cars have fallen in value. Suddenly they started to appreciate, so they increased over time instead of in value.”
In previous years, Zeigler Automotive cleared out used cars after they had been in stock for 60 days, aiming to avoid losses through depreciation. But in 2021, when cars rose in value even after 90 or 120 days in stock, Zeigler relaxed that 60-day rule.
However, the group was faced with the difficult task of finding used inventory: it bought cars at auction, searched for trade-ins, bought vehicles in bulk, and made deals with some automakers to buy vehicles that came off lease.
The purchase of one dealer in Indiana and four in Wisconsin in 2021 gave the group a “little bit of a volume increase,” Zeigler said.
Step One Automotive Group’s used-to-new ratio also improved as the stores concentrated on selling used vehicles. The group, based in Fort Walton Beach, Florida, entered the list at number 82 and sold 11,307 used vehicles in 2021, a 54 percent increase.
In 2021, the group sold 1.1 used vehicles for every new vehicle sold – up from 0.7 two or three years ago, CEO Fernando Arellano Geddes told Automotive News†
“Overall, the used cars have allowed us not only to maintain volume performance, but also to overcome performance relative to 2019,” said Geddes. “It’s an important, important part.”