Wholesalers are still an extremely important part of the automotive retail industry.Wholesalers provide liquidity to an extremely illiquid marketplace.Wholesalers escalate the number of overall used vehicle sales.  However, the recent recession combined with the industry’s used car shortage has made life extremely difficult for the automotive wholesaler.

For several years, many people have publicly predicted this shortage of used cars.  The evidence is clear that the used car supply is shrinking.  A used car manager and other industry professionals have been predicting this inventory shortage for some period of time, but the effects on the used car industry and the effects on the automotive wholesaler is just beginning to materialize.

Further, there are several macro trends that will continue to drive this current used car shortage.  For starters, the vehicles we are currently driving are very well made.  Gone are the days when a vehicle would need to be traded, simply due to high mileage.Cars are being made to last longer and to be safer.  Unfortunately for the automotive manufacturers, Americans are holding on to their vehicles longer. 

Also, Americans are currently more occupied with correcting their personal balance sheets. The average American citizen is currently focused on debt reduction and savings increases.  This can be illustrated by the St Louis Federal Reserve’s recent report that showed Americans in February 2010 are saving at a rate of 3.1%, compared to pre recession April 2005, when Americans were saving only .8%.

Official unemployment levels are nearly 10% which leaves most Americans feeling underemployed and will effect their decision to purchase a used or new vehicle in the near future.

The 2008 crisis massively damaged the automotive wholesale and retail industries.Currently, the credit default spreads are widening across Europe, making the possibility of contagion a real possibility.  Any negative effect this will have on the American Consumer’s ability to receive credit cannot be under estimated.

With all of these head winds, it is important for used car managers and automotive wholesalers alike to find new sources of vehicles.

Most Automotive wholesalers are excellent used car buyers and small business people.Automotive wholesaling can be highly rewarding but extremely challenging.it can also be highly stressful and a very low paying profession. However, there can be a silver lining to this used car shortage for some wholesalers who take advantage of this situation by providing sourcing assistance to used car departments. This dramatic shortage of quality used cars, for a few wholesalers, has moved them into a partnership with some used car managers.Used car managers are travelling more often because they are having difficulties sourcing inventory.Several used car buyers cannot travel because of store obligations.  This is where an astute automotive wholesaler can significantly leverage their ability to travel to their advantage in gaining business from used car departments.

There are bargains to be found outside of your home territory, because each car market in the United States is unique and different.  For example, convertibles are much cheaper in Michigan during the winter months than they are in Florida.These regional differences should be exploited. 

I have found that the best auctions to attend are far away from your home market, but not too far.The wholesale auction needs to be far away so fluctuations in price can occur, but not too far, because those price advantages will be offset by extremely large transportation costs. 

Having a successful relationship with a wholesaler, or buyer, who can travel out of market is a great asset for any new car franchise.A successful relationship between wholesaler and used car manager.