Dealers who participated in KeyBanc Capital Markets’ monthly automotive retail industry update survey gave some candid comments about their used-vehicle prospects, especially in light of 44 percent of respondents saying they expected gross profit per unit to soften by about $50.

Despite that gross-profit expectation, the vast majority of dealers surveyed in September (78 percent) told KeyBanc that they projected year-over-year used sales to rise this month. Of that amount, a third thought that sales would climb between 5 percent and 10 percent, while another third said that the increase would be up to 5 percent.

Among the comments KeyBanc shared, the perspective of used-car managers who participated in the firm’s monthly project covered a wide array of dealership elements, but many focused on inventory and gross profit.

“My inventory levels were just right. We re-price inventory on an ongoing basis, but our gross profit per unit is relatively stable,” one dealer said.

“We didn’t experience any impact. Our Inventory was good in 3Q, and we didn’t see any real impact,” another dealer stated.

“Maybe a couple hundred dollars lower than last year, but I’m new to this store,” yet another mentioned about gross profit.

The connection between inventory and gross profit continued in KeyBanc’s survey, which prompted analysts to say they “remain bullish on the outlook” for dealers.

“We could’ve used more cars, but gross profit per unit was about the same,” a dealer told analysts.

“A little pressure in prices, but no real push on our inventory position,” another dealer added.

One store shared about how what vehicles were on the lot didn’t give the dealership a good chance to succeed.

“Wrong kind of inventory. Too old. Too many miles,” the dealer said. “No impact on gross profit.”

Meanwhile, one dealer comment showed some recent successes — and the strategy of how the store obtained them.

“Our gross profit per unit went up $488 compared to last year,” the dealer said. “If a car doesn’t sell within 20 days, we immediately re-price. We don’t wait.”

The final two dealers who shared how their stores are performing with KeyBanc also touched on inventory.

“Not enough cars was our experience,” a dealer said. “We actually went up in gross profit — more than $100.”

The last dealer acknowledged, “Yes, prices are coming down, but not anymore than normal.”

Beyond the direct dealer comments, KeyBanc’s monthly survey also highlighted dealer sentiment about F&I gross profit, how subprime borrowers are being financed as well as elements of the new-vehicle department.

The majority of dealers surveyed (67 percent) told the firm that F&I gross profit is on track to increase by less than $50, while another 22 percent saw that figure softening by about $50.

A total of 56 percent of dealers indicated conditions for subprime financing was staying the same as only 11 percent saw finance companies tightening their underwriting for potential buyers in this credit tier.

Finally on the new-car side, 56 percent think gross profit per new model turned would be staying flat while the remainder split evenly between that figure increasing or decreasing by $50 or less.

A substantial portion of dealers surveyed (44 percent) said they see automaker stair-step incentive programs remaining stable while another 33 percent thought OEMs are ramping up these initiatives.