Two Retailer Strategies for Unlocking Older Used Car Profit: The Road Ahead
As supply constraints continue to reshape the used car market, many retailers are reassessing where they compete.
At our recent Road Ahead event, Peter Smyth, Director at Swansway Motor Group, and Chris Penny, Chief Product Officer at Vertu Motors, shared how their businesses are expanding into older, more affordable used vehicles - but with two distinct approaches.
Both Chris and Peter agree the opportunity is there, the difference lies in how they capture it.
Swansway: A high-turnover, value-focused model
For Swansway, selling older vehicles isn’t just about adding volume. It’s about creating a broader ecosystem around the customer.
Smyth explained that their Motor Match proposition emerged during the pandemic, when it became clear that strong demand existed for cars that sat outside the traditional approved-used criteria.
Rather than trying to force these vehicles into the approved channel, Swansway created a separate brand and proposition.
The formula for Motor Match is simple:
Price cars aggressively
Offer minimal included warranty
Allow customers to add protection products if they choose
Smyth compared the approach to the airline industry:
Premium customers can choose the “Emirates experience” through approved used vehicles. Others simply want the car at the right price, similar to flying with a budget airline.
The model relies on high stock turn rather than high margins. Swansway turns its used car stock around 14 times per year, accepting lower margin per unit but generating higher overall profitability through speed of sale.
But the real opportunity, Smyth argues, comes from what he calls the “tentacles of used cars.”
Before the car is even sold, multiple parts of the dealership generate revenue:
Preparation work
Parts and tyres
Servicing
Smart repairs
And once the customer enters the ecosystem, the longer-term opportunity grows.
A customer who initially buys a six-year-old car may later upgrade to an approved used vehicle, and eventually even a new one.
In that sense, lower-value used cars become an entry point into the dealership’s long-term customer journey.
Vertu: Retaining stock the business already owns
While Swansway built a new retail proposition, Vertu’s strategy starts with a different question:
Why were they letting so many cars leave the group in the first place?
Penny explained that supply shortages - particularly in the traditional five-to-seven-year-old segment - have forced retailers to rethink their sourcing strategies.
Demand still exists, but supply has tightened dramatically since the pandemic. As a result, Vertu is expanding further into seven-to-fourteen-year-old vehicles, where supply is more available.
But the bigger opportunity came from analysing auction disposal data.
Vertu realised thousands of vehicles they sold through auctions were later being retailed by other dealers - often at a profit.
In effect, they were feeding their own competition with stock.
Using Autotrader insights, the group discovered what those vehicles were eventually being advertised and sold for - revealing potential retail profits they were leaving on the table.
To address this, Vertu first introduced an internal auction system across its network, allowing vehicles taken in part-exchange to be redistributed between dealerships that could retail them.
This alone helped retain 5,000 to 6,000 additional vehicles within the group.
The next step is expanding their retail strategy to include older vehicles, rather than disposing of them.
The economics of lower-priced vehicles
Beyond supply dynamics, Penny also highlighted the capital efficiency advantage of selling cheaper vehicles.
The margin on a £20,000 car is often similar to the margin on a £10,000 car.
But if a retailer can sell two £10,000 vehicles in the same time it takes to sell one £20,000 vehicle, the return on capital improves significantly.
Lower-priced stock requires less capital to fund and can potentially turn faster, improving overall profitability.
Two routes to the same opportunity
While Swansway and Vertu are taking different approaches, both strategies reflect the same market reality.
Retailers are recognising that:
Demand exists across a wider age range of vehicles
Supply shortages require new sourcing and retention strategies
Lower-priced vehicles can improve stock turn and capital efficiency
For some, the opportunity lies in building a dedicated value brand. For others, it’s about retaining more of the stock already flowing through the business.
Either way, the message from the panel was clear:
Older used vehicles are no longer just a by-product of the retail process - they’re becoming a deliberate growth strategy.
What were the other key takeaways from The Road Ahead 2026?
From ideas to action, we’ve wrapped up of the event’s most critical takeaways, and the practical steps you can take now to drive meaningful change. Read more here.
