Canadian Auto World: Why Reconditioning at the Point of Wholesale Is on the Rise

The Canadian wholesale and retail automotive market have been in flux since the onset of the pandemic. Whether it’s chip shortages or other supply chain issues, there are plenty of factors playing into its volatility, but one thing that’s stayed constant is a demand for retail-ready vehicles.  

Traditionally, many dealers have preferred to purchase vehicles from marketplaces in retail or close to retail condition. Accordingly, from paintless dent repair and mechanical work to a quick wash and vac, in this constrained market, sellers are increasingly reconditioning their vehicles before wholesaling to help make them more “sale-ready” and appealing to buyers. This enables sellers to achieve two key objectives: quick liquidation because their vehicles are desirable, and a better return on both their asset and their reconditioning investment as more dealers compete for retail-ready units. Simply put, even minor reconditioning work ensures the vehicle not only sells faster, but that it also turns a higher profit. 

But, with tighter vehicle supply and both consumers and originating dealers choosing to hold on to their off-lease vehicles, we’re also increasingly seeing wholesale buyers rethink their strategy and invest in these reconditioning services, too. That’s because a lot of the inventory coming available in the wholesale marketplace is trending a bit older and higher mileage—making them prime candidates for reconditioning work. Match this with high consumer demand for used cars, and that means retailers need units that are front-lot ready the moment they arrive. After all, it can be costly to miss opportunities because your recently sourced inventory is waiting in line to get through your in-house reconditioning process. 

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Read the full article on page 10 in the January 2022 issue of Canadian Auto World.