NEW YORK -

Inventory: the focus of many used-car dealers as auction prices remained high this year and quality, used units proved scarce.

Lithia Motors senior vice president and chief financial officer Chris Holzshu offered some advice and best practices utilized by the dealer group’s stores during the recent J.P. Morgan Auto Conference.

On-demand webcast recordings of presentations from the event were posted online.During the question-and-answer section of Lithia’s presenation, Holzshu touched on how Lithia dealers, as well as dealers as a whole, can better score used inventory and how to get “creative” about getting the units that customers want on shop lots.

First, Holzshu focused on the inventory management system that all the Lithia Motors — which was No. 9 on Auto Remarketing’s Top 125 Used-Car Dealer Groups list — stores use to simplify their used-car buying experience.

“We use FirstLook for valuation of all our used-car inventories. It helps you see what used cars are selling for at auction and helps you see what they are going for in private-party sales. It gives you a little more information as far as what you know what the valuations on those used vehicles should be when you are trying to put a deal together,” Holzshu explained.

On top of the dealer group’s stores having access to this service, Lithia also holds online internal auctions, the executive shared.

Highlighting these in more detail, Holzshu noted, “In addition to that (FirstLook)  we have our own internal online auctions that we run, and the idea is … we want to be able to move the right vehicle to the right location and make the maximum profit … what I mean by that is if you give a two-wheel drive Ford pickup in Montana it is not sought after, but it would be in Corpus Christi, Texas.”

And on top of these auctions ensuring that the units “fit” the right stores, the exec noted that the auctions also “provide an opportunity for all our stores to buy the vehicles first before we send them off to wholesalers.”

Another conference attendee asked Holzshu where Lithia dealers have had the most luck finding used units and what other avenues its dealers utilized, other than traditional auctions.

Commenting on the percentage of used cars that come to the group’s stores via trade-ins and auctions, as well as the importance of used sales to the company, Holzshu noted: “When you look at our focus areas when we do our store reviews, used vehicles is the No. 1 focus because no matter what brand you carry … used vehicles allow you to sell every make and model out there.

“So teaching our stores during the recession, when they were losing new-car volume, and getting them back focused on our used cars has been a key part of our strategy,” he continued. “But we think there is a lot more opportunity there for us to grow used vehicles.”

The company, which averages about 47 monthly used-car sales per store, aims to reach a goal of 60, Holzshu pointed out. He said, “We are going to do that by not just buying through auctions,  but also by utilizing trades.”

(Holzshu noted that "about 50 percent of our vehicles have a trade that is retail saleable.")

Additionally, Holzshu further explained: “You want to develop relationships with other stores in the market and other new-car dealers that aren’t interested in used vehicles, working with brokers, looking at private party sales like craigslist, eBay, or even getting focused on buying vehicles directly out of the service drive.”

The exec also delved further into how dealers can gather trade-ins and potential customers straight from their service schedule.

“Check the service schedule; if you want Honda Accords and you see four of them coming in, put a big banner right in front of the service drive that says ‘looking for 2006 Honda Accords’ … next think you know, they want to sell you a car and that means you can sell them one,” Holzshu noted.

In conclusion, the Lithia exec noted it is all about “getting creative.”

“It is our job to get creative and not just have one source for used cars,” he stressed.

For more information from the J.P Morgan Auto Conference, see here.