I have to say something that is becoming clear to me.  I have been trying to deny it but it is now a pattern that only a fool would rationalize and disagree with.  Used car dealers are going extinct.  I bet you 15 guys per week, in idle conversation, tell  me they are struggling or are in real trouble.  But think about it.  The dealer management systems that have become pervasive, which dictate selling illogical merch retail for low profit, fast turn, as opposed to stocking brand specific merch that grosses way better and results in better dealer/ customer experience as well, has cut way down on wholesale/auction selection.     

This in conjunction with the cost of acquisition and sci-fi auction associated finance cost has overwhelmed some of the best used car dealers in the country.  I’m talking about generational businesses that are/were not share-croppers. It is not healthy for the industry in general and will bite the new cart franchise dealers in the ass in the long range.  A well rounded diet is fundamental to good health.  When you get fanatical on a specific binge, goofy things start happening and it is easy to rationalize the symptoms  with sunglasses that disguise the core reality.  Used car dealers are totally invested in what they do.  They are the epitome of skin in the game entrepreneurs.  Maybe not the most sophisticated group in the world, but knowledgeable hard working, free spirited knuckleheads. 

Fees, new management systems that fundamentally divert inventory away from remarketing channels, inaccurate/ bad vehicle history reports that the consumer believes even when they are wrong,  government regulation, and usury finance rates (dealers are actually charged as much as a buy-here-pay-here customer with a 420 empirical score), and you have a formula for lowering the common denominator of the car business.   Basically putting good guys out of business. 

Without question this is a disaster for auctions.  Without us as their backbone is a wet noodle.  We buy and sell with balls, brains and make things happen.  The formula driven buyer is none-emotional, with very little car skills (and if he does have them is not allowed to use them), and their lot looks like a Hertz rental return depot.  When you take emotion out of what we do you might as well be in the septic tank business.  Buy and sell 800 gallon or 2,200 gallon septic tanks.  Not much exciting going on there. 

There is no moral to this melancholy story, just an observation from a nut that loves what we do.  Saturday mornings, after selling 700 units for the week and thinking about what happened, who it happened with, and why it is the way it is, causes these thoughts to pop up.  If I have any conclusion to the past few days on the block it would be the result of what’s written above, fewer guys, fewer real players, no emotion in the market, in general, absolute slop at the sale and because dealers buy two cars on static sites their desire to jump in and do business is as strong as wet toilet paper.  We are like the Pony Express riders, a diminishing breed with great stories to tell and a wealth of knowledge, but a vanishing breed.