Used Vehicle Sourcing for Dealers | Sourcing Car Inventory

A row of parked used cars in a dealership parking lot

Vehicle sourcing is a common concern for decision-makers at used car dealerships—and recent industry trends are making this task even more challenging. While finding inventory for the used car lot may be more difficult than in the past, it isn't impossible.

The key is to understand how the market has evolved and to adapt accordingly. Below, we outline vehicle sourcing challenges and provide tips on how to overcome them.

Vehicle Sourcing Challenges in 2025

Different high-level challenges are eating into available inventory in the used car market in 2025. One existing issue is the dominance of digital giants like Carvana and CarMax, whose business models are built on sourcing vehicles directly from consumers. These behemoths have invested millions over the last few years in expanding their trade-in programs through national advertising and consumer-friendly websites, which enable customers to receive a trade-in quote in minutes—leaving independent and franchise dealerships with less trade-in inventory to pursue¹. Shifts in the used car market in the post-pandemic years further exacerbate this challenge².

More recent complications include looming tariffs. The tariffs threatened to drive up auto prices in 2025, causing a spike in auto sales in the first half of the year, but also forcing many consumers to really consider whether they need a new car.

Going forward, higher prices may disrupt the automotive supply chain—and cost-conscious consumers may be more likely to hang on to their existing cars, resulting in less used car inventory. Further, high interest rates are creating cautious consumers, worsening the problem.

4 Used Vehicle Sourcing Tips

Traditionally, used car dealerships have relied on trade-ins and auctions to stock up their lots. However, given the challenges outlined above, these techniques alone aren't enough.

A multi-channel approach to sourcing and acquisition is necessary to cope with today's inventory shortages. If you're a used car dealership owner or general manager, try these tips.

1. Source from Your Service Department

A service appointment can be an excellent opportunity to connect with a customer: They're already on the lot, they already trust your service department—and they may be especially interested in trading in their old vehicle when faced with a pricey service bill.

A customer relationship management (CRM) tool provides instant access to potential trade-in opportunities. Dealership teams can identify customers with positive equity in their current vehicle (i.e., those who owe less than the car is worth). Flag them in your CRM so your service team can initiate a trade-in conversation or, at the very least, provide the customer with a trade-in value during their next service appointment.

2. Use Customer Data

Rely on data to identify customers who may be worth targeting with a trade-in offer, including customers who have owned their car for several years. Or, perhaps, look at the last time a customer purchased a car from your dealership. Segment customers who have purchased five years ago (or later). Those who are making frequent visits to the service department are a good starting point. Additionally, consumers may be interested in a trade-in if they have:

Reached the warranty limit
Gone over the lease mileage

Or:

Hold high equity value in their vehicle
You notice they have a high monthly payment and perhaps they would benefit from a lower monthly payment

To optimize your targeting, use your dealer management system data to pinpoint in-demand vehicles. Sales trends can help you determine what cars people are interested in and likely to sell after reconditioning.

3. Utilize Auctions, Both In-Person and Virtual

Car auctions remain a viable source of inventory (they just shouldn't be your only source). The good news is that there's been a rise in online car auctions in recent years³. This allows for more geographic flexibility and, as a result, a broader selection of automobiles.

ACV Auctions is one resource for general managers and owners looking for inventory.

4. Build a Strong Trade-In Program

To encourage trade-ins, you want to make the process as easy as possible. First, ensure consumers are aware of your trade-in program. A clear website with an easy widget for trade-ins is a must—one of the many elements needed to optimize your dealership website.

You also want to make trade-ins attractive, so a trade-in incentives program is a great idea.

Examples of trade-in incentives include cash-back rebates, lower financing rates, and loyalty bonuses (such as additional trade value for returning customers)⁴.

Finally, reasonable appraisals—backed by a consistent and user-friendly appraisal process—are the cornerstone of a good trade-in model. ACV MAX's AI-powered appraisal technology improves the transparency and efficiency of appraisals.

Maintain Your Dealership's Competitiveness with ACV MAX

A multi-channel approach driven by data can help car dealerships maintain vehicle sourcing in 2025. ACV MAX utilizes data-driven technology to assist dealerships in navigating the evolving market. Learn more about our market insight, appraisal, and inventory management tools.

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