TORRANCE, Calif. -

When it comes to sourcing supply, the outlook for the certified pre-owned industry looks bright, says Toyota’s Brad Heagy.

He told Auto Remarketing that he believes the industry is past the peak in used values and over the trough in used availability, and that trade-in supply may be on the verge of increasing.

“I would say the industry has endured the market peak values and lowest availability earlier this year, and we see a favorable trend towards increasing percentage for customer trade-ins,” said Heagy, who recently moved over to the new-car side at Toyota. He now serves as the sales administration manager in the Toyota Sales Department.

“Historically, we enjoyed around 50 percent trade-in CPO mix, and in the last year we witnessed erosion to as low as 20–25 percent from this crucial used-vehicle source,” Heagy continued. “As Toyota has regained considerable retail market share in 2012, our overall business has been very respectable.

“Recent over-dependence on sometimes distressed auction units has lessened, and most stores have greater sourcing balance as we progress to the remainder of the calendar year,” he added.

And though still rather low, used supply appears to be improving.

CNW Research released its Retail Automotive Summary in the second half of August, and it calculated that the stock of used vehicles was up more than 15 percent year-over-year. In fact, used supply was at a level approaching 55 days and the highest it had been all year.

Of course, CNW president Art Spinella stressed that neither the used-car nor new-car market were “out of the woods just yet.”

Furthermore, around mid-August, NADA Used Car Guide executive automotive analyst Jonathan Banks said in a Guidelines report that “late-model used vehicle supply remains tight.” So how can dealers adjust to still-challenging supply and find the necessary units for their certified programs?

To shed some light on this, Auto Remarketing talked with Michele Peterson, global director of the Urban Science Dealer Services Group.

“We all know that inventory levels of eligible CPO units are down, and so from a dealer’s perspective, you really have to start to look at all of your available resources as far as stocking such units,” said Peterson. “You’ve got to just start looking and re-looking at all your available options on a more frequent basis than you probably would (otherwise).”

Editor's note: To read the complete story and learn more about best practices for CPO sourcing, be sure to read the Sept. 1–14 print issue of Auto Remarketing, which includes our monthly Certified Pre-Owned Focus section.