Industry Spotlight—Why tariffs could fuel a used car squeeze and how dealers are pivoting

Welcome to another edition of the Car Dealership Guy Industry Spotlight Podcast Recap newsletter.

In this episode, host Sam D’Arc is joined by Doug Obenhaus, Jr., President of Texas Auto Sales, and Dave Kang, Chief Marketing and Analytics Officer at Copart, to talk about wholesale used car dynamics, finding margin through recon, and how export demand and arbitration policy are reshaping auction lanes.

Stream the full episode now on YouTube, Spotify, or Apple.

1. Keeping the business model flexible.

After COVID, used car values surged, but Doug noticed that gross margins weren’t keeping up with the cost of selling. Running a retail operation meant managing staff, absorbing overhead, and spending time chasing deals that weren’t as profitable as they looked on paper. So he shifted to wholesale. 

Clean inventory, priced right, moved quickly to franchise buyers—and Doug didn’t have to carry the weight of a full retail stack to make the model work.

He’s not out of retail forever—but for now, the time and capital are better spent elsewhere.

2. Reconditioning work gets done faster and cheaper outside the shop.

Doug doesn’t route vehicles through a traditional service process. Instead, he sends work to a network of independent mechanics and body techs he’s built over time—people who work on their own terms and move quickly. With no internal shop markup or hourly labor fees, he’s able to turn cars faster and spend less doing it.

That margin difference is what allows him to profit on units that franchise stores often struggle to make pencil.

3. Strong vendor networks create flexibility when labor is tight.

At a time when most dealers are talking about technician shortages, Doug doesn’t seem worried. He’s not reliant on a single reconditioning pipeline. If one vendor is backed up, he calls another. That depth is what keeps his inventory moving without delays.

These are relationships he’s built over years by treating people fairly and staying out of their way.

There’s no scheduling software or internal process doing the work here. It’s just consistency, responsiveness, and trust.

4. Some cars are selling well above expectations—and not because of their condition.

Doug watches the auction lanes closely. He’s seeing certain vehicles—particularly Dodge Chargers and Toyota SUVs—selling for more than he’d expect based on mileage or condition. That includes cars with clear damage. The reason? International buyers.

And many buyers abroad are operating under a different set of rules. Some are tax-exempt for specific models. Others simply can’t source the inventory locally. Either way, U.S. dealers aren’t just bidding against each other anymore.

Copart – Are you looking to expand your dealership’s wholesale inventory? Finding front-line ready vehicles from finance, fleet, and rental consignors is now easier than ever. Copart Select gives you transparency that drives profitability and the assurance you need. Register as a Member to Get started at https://carguymedia.com/44x0XYn.

5. Policy shifts are starting to impact buyer behavior—before supply even tightens.

According to Dave, tariffs are already influencing the used car market—not because inventory has dropped yet, but because buyers are anticipating constraints. In some ways, it resembles the early COVID period, when everyone rushed to secure inventory before prices ran away.

Dealers don’t need to predict the policy environment. They just need to recognize when the lanes start behaving differently—and move early.

6. Arbitration policies need to reflect how dealers actually work.

Doug sources inventory from all over the country. Once a vehicle is purchased, it might take several days to arrive—and even longer before a technician can inspect it. If the arbitration window closes before that happens, the dealer is left holding the cost.

That’s why Doug prefers auctions with longer arbitration periods and enough time to do the job properly.

Dave said the decision to expand Copart’s arbitration window to 21 days was based on that exact reality: buyers aren’t operating down the street anymore.

7. When arbitration drags out, it’s a race against the clock.

For Doug, the real problem with poor arbitration isn’t the claim itself. It’s the hours lost dealing with it. Driving to a site. Arguing about the rules. Waiting for someone to take responsibility. The longer that process takes, the more money the dealer loses—regardless of the outcome.

When the fix takes five minutes and the dispute takes three hours, something’s broken.

8. Inspection tools are improving—but support still matters more.

Doug appreciates detailed condition reports. He values OBD-II codes, walkarounds, and video footage that lets him evaluate the engine remotely. These tools make it easier to buy from a distance. But if something slips through the cracks, what matters is how the platform responds—not how pretty the inspection report looked.

9. AI can help buyers move faster—but it doesn’t replace judgment.

Copart has invested in AI-powered diagnostics and automation, but Dave was careful not to oversell it. The goal isn’t to remove human decision-making—it’s to get more accurate information into the buyer’s hands, earlier in the process.

He says AI is being used behind the scenes to enhance inspections, analyze photos and videos, and surface potential issues that may not have been flagged manually. But the final call still belongs to the buyer.

10. Consistency is what earns repeat business—not features

Doug doesn’t care much about brand names or flashy tech. What keeps him coming back to a platform is whether the process runs smoothly from start to finish. If he can buy, receive, inspect, and resolve issues without losing time or money, he’ll buy again. If not, he won’t.

In a high-volume environment, predictability carries more weight than features.

Stream the full episode now on YouTube, Spotify, or Apple.

Interested in advertising with Car Dealership Guy? Drop us a line here.

Want to be considered as a guest on the podcast? Add your name here.