The Used Car Industry Isn’t Broken — COVID Profits Just Hid Bad Management

Everyone’s talking sourcing and exit strategy like it’s new. It’s not. Fundamentals never left — we did.

If you read LinkedIn lately, you’d think the used car industry just discovered sourcing discipline.

Everyone’s talking about smarter acquisition strategies, exit planning on appraisals, paying too much at auction, EV exposure mistakes, and “broken” tools.

Here’s the strange part: none of this is new.

What’s new is that normal market conditions finally returned — and exposed how far many dealers drifted from the everyday core principles of used car management during COVID.

The COVID Profit Hangover

During the pandemic, dealers didn’t just experience high margins — they experienced unnatural market behavior:

• Artificial supply shortages
• Used car appreciation
• Cars are selling regardless of buy-in discipline
• Gross profit without process

That era created a dangerous illusion:

“If everything sells, then everything we’re doing must be right.”

It wasn’t. Margins simply masked mistakes.

When Excuses Replace Accountability

Fast forward to today, and the excuses are loud:

• “It’s vAuto.”
• “It’s the market.”
• “It’s EV volatility.”
• “It’s affordability and rates.”

Let’s be clear:

Software doesn’t buy cars. People do.

Technology reflects decisions — it doesn’t replace them.

If your inventory is upside down, aged, or misaligned with demand, that didn’t happen because of an algorithm.

It happened because cars were acquired without a business plan.

Used Cars Were Never Investments

COVID distorted a core truth:

Used cars are not investments. They are perishable inventory.

That requires:

• Demand-based acquisition
• Exit planning at the moment of appraisal
• Scarcity-aware pricing (not panic discounting)
• Relentless focus on velocity

When appreciation disappeared, a lot of stores realized they hadn’t managed used cars — they’d just ridden a wave.

EVs, Affordability, and the Perfect Storm

The normalization phase didn’t arrive alone. It brought:

• EV valuation mistakes and incentive distortion
• Rising interest rates and payment sensitivity
• Affordability pressure and slower retail velocity

But here’s the uncomfortable truth:

These headwinds didn’t create weak operations. They revealed them.

What the Survivors Are Doing Differently

The dealers winning right now aren’t chasing hacks. They quietly returned to:

• Buying to real demand (not gut feel, not hype)
• Pricing with scarcity in mind (not racing to the bottom)
• Planning the exit before owning the car
• Running used cars like a business — not a gamble

Want a Simple Discipline Reset for Your Appraisals?

If your store is feeling the hangover right now, you don’t need a new tool — you need a repeatable process.

My quick filter: pair Days Supply with Scarcity before you buy, price, or defend gross.

• High scarcity = protect gross
• Low scarcity = buy it right or don’t buy it
• No exit plan = no acquisition

Want the playbook? Join my AI Copy Advantage – 7 Day Challenge, and I’ll share the exact checklist + pricing discipline workflow I use to keep velocity up without giving gross away.

Get the 7-Day Challenge + Checklist →

The Mic Drop

Here’s the part nobody wants to say out loud:

The industry didn’t create too many problems. It created too many COVID managers.

Managers trained in a market that didn’t punish bad decisions… now operating in one that does.

Normal market physics are back. So are consequences.