The 90-day write-down
On the first of every month, Kunes Auto cuts inventory cost by an undisclosed set amount on whatever vehicles are unsold for 90 days or longer. This cost directly hits the used-car department's selling gross. Kunes explained that the practice encourages sales managers to ensure they acquire cars correctly and that they're trying to move the oldest inventory before they take that penalty.
Purchase from within
Kunes Auto stores are broken into regions, and stores are allowed to purchase vehicles from one another, enabling some of the group's more rural dealerships to access inventory from larger stores.
The stores achieve savings by reselling used vehicles within the dealership group and avoid sending cars to an auction to sell, Kunes said.
"We'll try to conserve those auction fees and do it all in-house," he said.
Inventory management software also comes into play, something that Kunes and many dealers use to help monitor the U.S. market, create pricing descriptions and upload photos.
Having a website provider also helps, Kunes said, particularly one that is savvy about building a dealership website from the ground up that can be used effectively via phones and desktop computers. A favorite is software provider Motive, he said, particularly with its focus on search engine optimization and search engine marketing.
Software tools have become increasingly commonplace among dealers in the post-pandemic marketplace.
Kunes Auto also tries to find "diamonds" and niche vehicles that others don't want.
"Whether it's a model that maybe has lost its luster or isn't quite as popular, oftentimes we'll be able to buy a lot of those at a good price and be able to market those effectively," Kunes said. "We're 28 dealerships. Somebody's going to be able to sell that vehicle, whether it's a Range Rover that we don't normally stock or a $5,000 car."
When the pandemic hit, Kunes Auto heard from some of its manufacturer representatives about supply chain constraints, so it become more aggressive in securing both new and used cars, even purchasing new vehicles from other dealers.
And because Kunes Auto operated in more rural markets, it needed a used-car selection to make it a destination, he said.
New-car shoppers could just as easily buy a used car, after all. Keeping new-car stocks high also allowed it to continue to take trade-ins and retail as many used vehicles, Kunes said.
Kunes Auto expanded its used-car inventory in 2021 and part of 2022. As the supply chain strain began to ease, they began to roll that back again through early 2023 in an effort to stay ahead of the curve.
Most of all, the basics still matter, Kunes said.
"It's still about acquiring vehicles at the right cost, marketing them correctly, providing good value to our customers and a great experience," Kunes said.
"If we can do that correctly, we will typically be successful in our used-car operations."
Kunes Auto ranks No. 96 on Automotive News' most recent list of the top 150 dealership groups based in the U.S. and No. 42 on Automotive News' list of the top 100 dealership groups ranked by used-vehicle sales. The group also owns RV dealerships.