Tariffs or No Tariffs, Smart Dealers Are Betting on Used Vehicles

By: Darragh Grove-White, Automotive Marketing Advisor

The tariff situation may be fluid, but one thing is certain—dealers who wait for a final ruling on March 6 will already be behind. Smart operators aren’t reacting; they’re adapting.

New car affordability is already strained, and whether tariffs hit or not, the economics of vehicle sales are shifting fast. Savvy dealers are limiting their exposure to new inventory, reinforcing their used vehicle strategies, and doubling down on fixed ops. This isn’t just about playing defense—it’s about taking advantage of what could be another used car boom.

We saw this happen during the pandemic, and the fundamentals are similar now: inventory constraints, rising costs, and changing consumer behavior. In this article, we’ll break down the key strategies that will separate winners from those scrambling to adjust when it’s too late.

Now Is NOT the Time to Double Down on New Inventory

The automotive market is already undergoing a major shift, and smart dealers are reading the signals. Whether tariffs materialize on March 6 or not, the writing is on the wall: new car affordability is at a breaking point, and used vehicles are once again becoming the dominant play.

Domestic automakers—especially Stellantis—are particularly vulnerable due to their pricing structures and competitive positioning. As OEMs adjust their production strategies and consumer price sensitivity remains high, dealers who get ahead now will be best positioned for sustained profitability.

Dealers who want to stay ahead should:

Limit exposure to new vehicle inventory
Reduce floor plan costs
Pivot toward used inventory and fixed operations

With Americans keeping their vehicles for an average of 12.6 years, this trend isn’t going away anytime soon. Waiting for a final tariff decision means missing the bigger picture—longer ownership cycles, tightening new car affordability, and shifting consumer behavior will reshape the market regardless.

We’ve seen this play out before. During the pandemic, supply chain disruptions dried up new inventory, sending used vehicle prices soaring. While today’s situation is different, the fundamental pressures—high new vehicle costs, economic uncertainty, and extended vehicle ownership—are creating eerily similar market conditions.

If tariffs do take effect, the shift will only accelerate. But even if they don’t, dealers who double down on quality used inventory now will have a major advantage over those who wait.

Manufacturer Response: Tighter Inventory, Higher Prices

The shift toward tighter new vehicle inventory and elevated pricing is already in motion—not just as a reaction to potential tariffs, but as part of a long-term recalibration in automotive production and pricing strategies. Manufacturers are working to maintain profitability by limiting excess supply, which means new vehicles will stay expensive and harder to come by.

Even as supply chains normalize, consumer price sensitivity remains at an all-time high. With affordability concerns driving demand for alternatives, dealers who optimize their used inventory strategy now will be the ones winning market share—and the real opportunity isn’t just in used vehicles.

Longer Car Ownership = Bigger Fixed Ops Opportunity

New vehicle pricing pressures, extended financing terms, and shifting consumer priorities are pushing ownership cycles to record lengths. This means a golden opportunity for dealerships to strengthen their fixed ops revenue streams, as customers prioritize maintenance, repairs, and service over purchasing a new vehicle.

To capture this surge in demand, dealers should:

Proactively market service & repair upsells—timing campaigns around mileage milestones.

Expand extended warranty & service plan offerings—positioning them as cost-saving solutions at the point of sale.

Scale Certified Pre-Owned (CPO) programs—meeting the demand for manufacturer-backed used inventory.

Adopt fixed ops video selling tools—leveraging platforms like BombBomb or SnapCell (TradePending) to improve transparency and build trust in service recommendations.

How Dealers Can Get Ahead Now

The “Buy Canadian” campaigns popping up at dealerships across the country? Cute. But let’s be honest—that’s a reaction, not a strategy. While supporting domestic manufacturers is a nice sentiment, it won’t solve the bigger issues at play: affordability pressures, longer ownership cycles, and shifting consumer behavior. Dealers who focus solely on short-term messaging instead of future-proofing their operations will be caught flat-footed.

The next 12-24 months will require more than just patriotic marketing. It’s time for a digital transformation to meet customers where they are, protect margins, and stay ahead of industry shifts—tariffs or not. Here’s how to do it:

1. Overhaul Your Digital Infrastructure

Optimize your website & inventory feeds to prioritize used vehicle sales and drive service bookings.
Leverage AI-driven dynamic pricing tools like ProfitTime to maximize used vehicle margins.
Adopt a high-velocity used car strategy—and make sure your third-party marketing partners can keep up.

2. Go All-In on Video Selling & Digital Sales Tools

Forget the old-school, text-heavy follow-ups—video is where the real engagement happens. Dealers who integrate video into their sales and service process are closing more deals, upselling more ROs, and building stronger customer trust.

Train sales & service teams to use personalized video messaging for lead engagement & upselling service work. Build a video training library to scale adoption.

Leverage AI-powered internet lead capture tools like Gubagoo and Matador to engage customers before they ghost.

Create a video-first culture with walkarounds & trade-in appraisals to boost engagement and conversions month-over-month. Internal private sale competitions where best practices are shared can be transformative.

Test AI-driven sales campaigns with tools like RibitAI for extra firepower when your pipeline needs a push.

3. Stop Overpaying for Eyeballs—Audit Your Advertising & Marketplace Spend

It’s time for dealers to get ruthless about where their ad dollars go. Too many dealerships are still burning cash on “premium” marketplace packages that do little more than slap a “Boost” badge on listings. Sorry, AutoTrader Marketplace, but if a vehicle is priced competitively to the local market, it’ll move—with or without your upsells.

Here’s where to focus your budget instead:

Get a third-party audit of your ad agency, digital spend, and marketplace ROI—every dollar should be pulling its weight.

Shift budgets to high-intent, predictive traffic sources like Google Ads, PMAX, Credit & Finance leads & YouTube video ads that drive real buyer engagement.

Go by facts, not feelings. Lead volume is meaningless if those leads don’t convert into sales. In 2025, cost per sold unit is the only metric that matters.

When I was Marketing Director for eight OEM-certified dealerships, we activated Autograph Analytics to cut through the noise and track ad spending down to sold units—no fluff, just facts. If you don’t have the in-house talent to run that level of data-driven execution, C-4 Analytics brings the same deep marketing insights—but with a pilot to actually fly the ship. They’re a go-to in the U.S. for dealers who want strategy and execution, not just spreadsheets.

4. Dominate Fixed Ops & Service Revenue

New car sales will fluctuate - but fixed ops is the ultimate recession-proof revenue stream. Dealers who lock in service retention now will have a steady cash flow, no matter what happens with tariffs, inventory, or OEM pricing shifts.

Run service retention campaigns targeting existing customers with maintenance & repair offers they want before they start shopping elsewhere.

Fix your fixed ops experience—because no one cares how good your coffee machine is if their oil change or peace of mind inspection takes three hours. Offer loaners, or pick-up & drop-off options to boost retention and stubborn service CSI scores.

Bundle maintenance plans—work with your Service Manager or VP of Fixed Ops, & Finance team to create one-, three-, or five-year service packages that drive long-term revenue at the point of sale while making the cost-savings value a no-brainer.

Pro Tip: If you bought your own EV loaner fleet at a 75 percent taxable expense in Canada after reading my last article, send me a note—I want to hear how it’s going!

Final Thought: Hold Onto the Right Things

Love him or hate him, Donald Trump has a way of shaking things up—and the auto industry is no exception. But here’s the reality: smart dealers don’t wait for politics, tariffs, or OEM pricing models to dictate their success. They focus on what always works.

Used vehicles will always be good business—but only for dealers running a high-velocity pricing strategy with dialed-in merchandising, optimized marketing spending, and dynamic pricing tools. If you’re still clinging to outdated inventory management habits, now’s the time to adapt—or get left behind.

One of my favorite dealers I’ve worked for, Kyle Bachman at Harris Dodge, exemplifies exactly the kind of smart used vehicle strategy I’m talking about—breaking a personal record in January, of all months. He’s great to watch and learn from—and even better to chat strategy with if you know him.

Fixed ops is the ultimate recession-proof revenue stream. Dealers who lock in service retention now will have steady, predictable cash flow, no matter what happens with tariffs, inventory shortages, or fluctuating interest rates.

What to Do

The auto industry is shifting fast, and dealers who cling to old habits—like overloading new inventory or relying on outdated OEM pricing models—will be left behind.

The smart move? Double down on used vehicles, fixed ops, marketing, analytics, and digital transformation. Dealers who adapt now will future-proof their business, no matter what happens with trade wars, or market shifts.

The next 12-24 months will separate the winners from those playing catch-up. The only question is—are you ready?

Tariffs or No Tariffs, Smart Dealers Are Betting on Used Vehicles - And You Should Too