Sorry to Disrupt You - Issue #2: Pavlov's Dogs

OEMs have conditioned you, like Pavlov’s dogs, to hyper-fixate on your own franchise’s used cars. Every time you see a late-model [YOUR BRAND] coming off lease, you salivate.

That’s not a business strategy.

That’s conditioning.

…and it’s costing you more than you think.

Most dealers today aren’t truly used-car operators. Instead, they’re extensions of their new car franchise. There’s nothing inherently wrong with that… until it starts dictating your decisions in a way that limits your profitability. And that’s exactly what’s happening everywhere I look.

Walk into almost any dealership, and you’ll see the same pattern. A Honda store selling mostly used Hondas. A Toyota store selling mostly used Toyotas. In many cases, 70–80% of used inventory is tied directly to the franchise brand.

That’s not by accident.

It’s by design.

So how did we get here? It started years ago with OEM-driven programs designed to create more accessible entry points into their brands. Certified Pre-Owned (CPO) programs—popularized by brands beginning with Mercedes-Benz—were a smart move. They expanded the buyer funnel, built brand loyalty earlier, and created a structured path for off-lease inventory.

But OEMs didn’t stop there.

They layered in incentives. Below-the-line money tied to hitting specific CPO targets, including, CPO penetration, off-lease purchases, and used-car volume tied to the brand. On the surface, this looked like OEMs supporting their dealers. In practice, it changed dealers' behavior. Dealers didn’t just participate in these programs. They started optimizing around them because it became part of their total net profit dynamic.

But at what cost? As it turns out today, a huge one.

Instead of asking, “What used-car inventory will generate the highest net profit?”

Dealers started asking, “What do I need to do to hit my OEM targets?”

And once you start optimizing for an OEM's scorecard instead of your P&L, you stop operating like an independent business and start acting like an OEM's pre-owned distribution arm. Which wouldn’t be a problem, except… the math doesn’t work in your favor. In many cases, a non-franchise unit produces 2 to 3x the gross of a typical perceived “hot” in-brand unit. Sometimes more.

For example, at one Honda store I looked at recently, 78% of their used volume was Honda.

Average profit per Honda: $391.

Average profit on non‑Honda units (Chevy, GMC, Ram, Acura, etc.): $978

In other words, this Honda store's “favorite” units were its least profitable sales. To make matters worse, they’re fighting over the same fish… in the same pond… with every other dealer in their market… and wondering why it’s getting harder to make money. Meanwhile, they’re ignoring the more lucrative, less-contested profit sitting in other brands.

Which brings me to this: Most stores don’t have a used-car strategy.

They have a used-car habit created by the same conditioning I mentioned earlier.

They take what comes from off-lease returns, ex-service loaners, brand-tied trade-ins, and OEM auctions, and build their used-car inventory around it. The problem is that’s not how the used-car market works.

When you narrow your inventory to primarily in-brand units, you’re effectively shrinking your buyer pool before the customer even walks on the lot or lands on your website. You’re choosing to compete where the competition is highest… where margins are thinnest… and where differentiation is hardest. All in the name of staying aligned with a system that was never designed to maximize your net profit.

There is not a single market in the country in which any franchise represents even 30%, 40% or 50% of the sales in any given month.

Curious where your store stands? Evaluate:

#1 What percentage of your used volume is your franchise brand?

Hint: If it’s 60–80%, you’re an outlet.

#2 Which brands actually produce your highest average gross and net?

Hint: No guessing allowed. It’s time to dig into the data.

The best used-car operators in the country are equal opportunity buyers. They don’t care what badge is on the hood. They care about what the market wants, how fast it will sell, and how much money it will make. (spoiler alert - sales turn dictates how much)

OEMs have already trained you to ring the bell and chase their units. The question is: who is really benefiting from this arrangement? Them or you?

Now, this doesn’t mean you abandon your OEM programs altogether - or at all. It means you stop letting them dictate your entire strategy. Because at the end of the day, your OEM isn’t responsible for your net profit. You are.

If you’re ready to take control, here’s my recommendation:

• Audit your mix: Pull a 12‑month report on the used sales results, by-brand: volume, average gross. Circle the brands that quietly outperform your franchise.
• Set a mix target: Cap your franchise brand at, say, 50–60% of used volume, over time and commit to growing your volume of profitable non‑OEM brands.
• Build real sustainable acquisition channels: Treat service drive, street buys, and conquest trades as primary sources, not side hustles.
• Measure like an owner: Start tracking net profit and turn by source, not just CPO units and OEM bonuses.
• If you want to take it to another level I can help you learn how to determine which cars deliver NET PROFIT - not just gross profit and volume.

If you’re serious about becoming a used-car dealer, this is your wake-up call. The sooner you start thinking like an independent operator, the sooner your used-car operation becomes what it should have been all along: A profit center.

Short answer: [one or two sentences that answer the headline outright, before any set-up].

Key takeaways

1. [First takeaway, stated as a finding, not a topic]
2. [Second takeaway]
3. [Third takeaway]
4. [Fourth takeaway]
5. [Fifth takeaway]

By the numbers

The standard to hold

[What has to be true before anything else works. Name the specific platforms, OEM programs, industry bodies or published research where they are not confidential.]

How the best operators run it

[The steps in order. Who owns each one, and how often it happens.]

Comparing the two common approaches

How to choose

This fits you if: [ ]

This does not fit you if: [ ]

Five questions to ask before you commit

1. [ ]
2. [ ]
3. [ ]
4. [ ]
5. [ ]

Red flags: [ ]

The mistakes that cost the most

[Two or three specific, expensive mistakes and what they cost.]

Your next three moves

1. [Action, with an owner and a date]
2. [Action]
3. [Action]

About this guidance

Written by David Spisak from nearly 50 years in retail automotive. Last reviewed [month year].

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