The ramp-up of standalone used-car stores from the likes of Sonic Automotive, AutoNation and Penske Automotive Group is certainly one of the key pre-owned strategy moves leading the retail auto market right now.
But it’s not just the big kids on the block.
Todd Caputo and his Sun Auto Group — a small collection of one franchised dealership and two pre-owned stores — has been in the used-car standalone store game since the 2000s.
Caputo’s father, Joe Caputo, opened Sun Chevrolet of Chittenango, N.Y., in 1979, having previously been a used-car dealer in Syracuse, N.Y.
Todd Caputo, who is now 46 and the dealer principal and president of the group, grew up working in the new-car dealership and continued to do so through college.
In 2004, he opened the first standalone used-car store, which had been a Lincoln-Mercury store in Cicero, N.Y., that closed. Caputo purchased the building and turned it into a pre-owned vehicle superstore.
In 2009, Caputo opened another used-car superstore, this time in Cortland, N.Y., after purchasing a building that had been a Ford location.
Caputo, who put together his own branding as the “Used Car King” in the local market, realized an opportunity in standalone pre-owned stores early in the game.
“I really saw, even back then, that I thought it was a good opportunity for me to kind of have a cluster in this market, where I could cluster a new-car store and kind of piggyback off the Sun name, and be able to use the resources from my new-car store to sell used cars,” he said.
These days, the three locations — Sun Chevrolet, Sun Auto Warehouse (located in Cicero) and the Sun Auto Warehouse of Cortland — combine to retail 4,800 to 5,000 used cars each year, Caputo said. They sell about 800 to 1,000 new cars in total.
And in recent news, the group constructed a new facility that replaces the building at the Cicero location, which was the first standalone store it opened.
“I was able to acquire the land around me at my Cicero location. When I first bought the property, it was about five acres. And about five years ago, I was able to purchase another 48 acres around the property,” Caputo said. “So, that allowed me to build a larger building, which I desperately needed to do.
“Because that dealership, the Lincoln-Mercury store that I bought, used to retail like 40, 50 cars a month. And we were selling 200, 250 used cars a month out of that place. We just outgrew it,” he said.
What’s more, the group’s centralized business development center was there, so “we just didn’t have the room,” Caputo said.
Construction on the new facility, which can fit 20 used cars in the showroom, began in March of last year, and the group held a soft opening in November. A larger grand opening is on tap this winter.
“Everything that the manufacturer has asked a lot of the new-car facilities to do, I did; from a child’s playroom to a convenient waiting area with a fireplace. I built a very large service drive, a service department,” Caputo said of the new facility for the standalone pre-owned store. “There’s an indoor delivery area where customers can take delivery of their cars inside; especially this time of year, it really matters a lot. So all of the deliveries are done indoors.”
The design, Caputo says, gives the store a bit of “personality.” And, he said, the goal is to provide an experience at the used-car store that is just like one you would receive at the new-car store.
He noted that “we wanted to give them the experience of a new-car experience while they’re buying a used car, regardless of what they pay.”
The look of the store, he said, is similar to that of a luxury car brand store: “That’s the feel that you get when you walk in, and that’s the way we try and treat people.”
As for what’s in store for this Cicero location, Caputo has big plans.
“We’re expecting to sell 3,000 cars out of here this year, and I truly believe we’re going to do it,” he said.
And they have already begun a similar remodel to the Cortland store, which is scheduled to finish this spring.
Advantages to standalone pre-owned stores
One plus to having standalone pre-owned car stores, Caputo said, is that, “I can brand myself and not necessarily worry about the manufacturer controlling how I brand myself. I can build the building the way I want to build it. I don’t have to worry about the manufacturer dictating to me what my processes need to be … I don’t have anybody to answer to. When you have a franchise, you have a lot of people you’ve got to answer to, a lot of rules that you have to follow, a lot of guidelines that you have to follow. And this gives me the flexibility not to have to do that …”
Another perk has to do with trade-ins.
The average used car they sell has about 28,000 miles and is 2 to 3 years old. The average price is in the low $20,000 range.
So with these being later-model units, it actually helps the new-car side of the business take in trades that they might not otherwise have utilized.
Keys to success
Caputo, who says he has kept up with the public dealer groups’ efforts around standalone pre-owned, was asked what has made Sun Auto Group successful at operating their own used-car outlets.
“Our biggest strength would probably be the organization of people that I have — management team, back-office people, fixed operations … branding and marketing,” he said. “More than anything else, honestly, I’ve got really good car people working for me in all three stores. And that’s really been the key to our success and our growth more than anything else, and I would probably say that’s No. 1.”