Buying Smarter = Grossing Higher

How to Make Smarter Inventory Acquisition Decisions that Will Better Impact Your Bottom Line

David Farmer, founder and CEO of Intice, recently stated, “You make your profit the day you buy the car.”

This simple truth of buying cars right, often overlooked, is the key to unlocking higher profits in the car business.

Our industry is obsessed with selling. When you think “car business,” you immediately picture a salesperson. But we’ve got it backwards. We put all our energy into selling and almost nothing into buying cars.

Just look at the numbers. Used cars generate 33% of a dealership’s revenue, not even counting service. You’d expect a third of vendors to focus on pre-owned, with half of those helping dealers buy cars faster and cheaper. But reality? Only 24 out of 533, or 4.5%, of vendors at NADA 2025 help dealers in any way buy, obtain or acquire vehicles from any source.

The Buying Bottleneck

We did a pull and asked our dealers what the right ratio between car salespeople and car buyers is (1:1, 1:2, 1:10, etc.). Not only did we discover that most dealers don’t have dedicated buyers, but the majority of them don’t have a single buyer other than their used car manager.

Having one person buying cars and 15 selling cars is like running a restaurant with 15 servers and only one chef. This imbalance creates problems:

• Aging inventory
• Customer experience issues
• High competition levels

There’s probably about two dozen more things dealers struggle with that would be resolved with the right vehicles at the right prices.

Traditional Methods Falling Short

“Traditional methods like trade-ins and auctions, once the backbone of inventory acquisition, are proving less effective in a fast-evolving industry,” according to DigitalDealer.com.

1. Auctions: Easy but expensive. Pay up to $1,000 per car, plus recon costs. By the time it hits the lot, profits have evaporated.

2. Scalable trades: Great in theory but requires hefty advertising budgets. It’s the “spray and pray” method, only viable for top-tier dealers.

3. ICO leads: No control over spend or closing rates. Success means higher costs. Not scalable.

4. Private-party market: Often overlooked but full of potential. Challenges include vetting listings and negotiating prices.

The VAM Revolution

Dealers wish they could exclusively source their inventory directly from private sellers, but logistically, it’s just not feasible.

That is until recently, when technology caught up.

Vehicle acquisition management software is changing the game. It’s not just about organizing listings and conversations but allowing dealers to engage more sellers, set more appointments and buy more cars.

Imagine being able to access the entire private-party market in one place without salvage cars, dealer listings, per-car fees, transport costs or the risk of your margins being eroded by high recon.

Dealers who leverage this strategy:

• Save on average $1,200 on recon, transport and buy fees per car
• See front and back gross increase by 62%
• Are over 95% more efficient compared to dealers manually buying off the street.

A New Approach to Inventory Acquisition

This isn’t about abandoning auctions entirely. Street purchasing is a tool to grow inventory, diversify mix and connect with thousands of potential customers.

It’s not lead generation either. We’re talking about a cold, outbound approach, targeting serious sellers who’ve already listed their vehicles. It’s a goldmine of potential customers just waiting to be tapped.

The Homework

Find a dealership that’s aggressive in street purchasing and ask them why. I guarantee they’ll rave about how it’s vastly superior to alternatives. If they could buy all their cars off the street, they would. In the end, the dealerships that master the art of buying will be the ones that thrive because in this business, you really do make your profit the day you buy the car.

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