Zeigler Auto Group of Kalamazoo, Mich., significantly improved its 2021 used-to-new ratio from the 1-to-1 ratio it posted for 2020, company president Aaron Zeigler said. Automotive News. Zeigler moved up nine places to 23rd, selling 29,604 used vehicles last year compared to 20,920 in 2020, an increase of 42%.
The dramatic increase in used-vehicle inventory became a focus point for the group in May 2020, at the start of the pandemic, Zeigler said. The focus persisted in 2021 with the shortage of chips and the limited supply of new vehicles.
“Almost everything we knew about the used car business has changed,” Zeigler said. “Historically, used cars depreciated. All of a sudden they started appreciating, so they went up in value instead of down over time.”
In previous years, Zeigler Automotive disposed of used cars after 60 days of inventory, in an effort to avoid losses due to their depreciation. But throughout 2021, as cars rose in value, even after 90 or 120 days of inventory, Zeigler relaxed that 60-day rule.
The group, however, has not escaped the difficult task of finding used inventory: it has purchased cars at auctions, sought trade-ins, purchased vehicles in bulk and entered into agreements with certain car manufacturers to buy vehicles in end of lease.
The purchase of one dealership in Indiana and four in Wisconsin in 2021 gave the group a “small volume boost,” Zeigler said.
Step One Automotive Group’s used-to-new ratio also improved, with its stores focusing on the sale of used vehicles. The Fort Walton Beach, Fla.-based group entered the list at No. 82, selling 11,307 used vehicles in 2021, up 54%.
In 2021, the group sold 1.1 used vehicles for every new vehicle sold, compared to 0.7 two or three years ago, CEO Fernando Arellano Geddes said. Automotive News.
“Overall, used cars allowed us to not only maintain volume performance, but also outperform 2019,” Geddes said. “It’s a key, key element.”