2017 marked a lackluster year for many powersports dealers. Unit volume did not meet projections, and we’re seeing more dealers sell inventory at or below cost just to keep it moving. While it appears that 2018 will look much the same as 2017, there is one caveat. Pre-owned unit sales will most likely continue to outpace new unit sales, due to consumer demand.
Dealers would be wise to analyze today’s consumer. Changing demographics show that Millennials and are overtaking Baby Boomers in terms of spending power. These price-sensitive generations are more likely to consider pre-owned a more appealing option for their already-strained budgets. New bikes are often priced outside their comfort zone. As a result, consumers who delayed purchasing a bike in 2017 will likely shop for gently used bikes in 2018.
Because of this shifting demographic and financial constraints, powersports dealers should outfit their pre-owned inventory with late-model bikes that either have a little bit of manufacturer warranty left, or are just outside of manufacturer warranty coverage. In addition to being top sellers, these bikes offer the most opportunity to sell F&I products on the back-end, helping powersports dealerships increase their profit potential. Adding a CPO component can also help move these bikes off the floor and give the consumer an added value component, as well as help to increase repeat service drive business. Continue reading