Average gross profit per used vehicle at Sonic Automotive Inc.’s franchised dealerships fell 6 percent to $1,626 in the first quarter. Used-vehicle sales at its franchised dealerships were down 7 percent to 25,107 units in the quarter.
Sonic said the average gross profit per vehicle and F&I at its used-only EchoPark business was $1,907 in the first quarter, a drop of 30 percent. EchoPark stores sold 19,980 used vehicles, soaring 34 percent.
“In the used-vehicle business, wholesale auction prices for 3-year-old vehicles unexpectedly rose over 6 percent since the beginning of the year as nearly new inventory continued to face elevated demand from rental car companies and dealers at auction,” CEO David Smith said during the company’s first-quarter earnings call April 27.
President Jeff Dyke, also on the earnings call, said in January and February the auto retailer was buying vehicles at auction in the $24,000 range. But, Dyke noted, in two weeks in March, those vehicle prices rose to $27,500 or $28,000.
The uptick in pricing has impacted sales at EchoPark, Dyke said, who noted the business unit’s volume was spiking in January, February and early March.
Mark Hollmer, Gail Kachadourian Howe, John Huetter and Jack Walsworth contributed to this report.
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