On The Road To Success

Careful research and observation drives small-town used car dealership to the top

The used car business may have a tarnished reputation in some people’s eyes, but to Anthony Underwood it’s a ticket to the American Dream. Underwood, the owner of Anthony Underwood Automotive in rural Brighton, Alabama, bought into this dream three years ago when he set up shop in a vacant corner of a used car dealership lot. With five cars in inventory and less than $50,000 in start-up capital, Underwood financed his fledgling business. Today, his operation specializes in all makes of late model used cars, including Ford Escorts and Hondas. Operating about 12 miles outside of Birmingham on Bessemer Highway, he sells 500 preowned cars a year, with annual sales of $2 million.

Underwood, 40, used his 20 years auto sales experience, observation and extensive research of the industry to fuel his dealership. He says the soaring prices of new cars and a saturated market among off-lease, latemodel cars (vehicles with expired leases that are returned to the market) provided a niche and profitable opportunity for him to sell preowned automobiles. “I had seen the price of a new car almost double since the 1970s,” says Underwood. “Yet people can get a pre-owned car that is one or two years old for 30% off the price of a new car.”

In 1994, after informally polling the businesses on “Car Row,” a car dealership strip on Bessemer Highway, he leased space in a trailer owned by an existing dealership. The only advertising was a 6-by-5 foot sign that was visible from the highway. Underwood says people who recognized him from the community came in and soon, “we were selling more cars than the operation from which we’d leased the trailer space. [But] one day, I got a letter from their attorney asking us to vacate the space.” For $130,000, he purchased and renovated a run-down service station to serve as Underwood headquarters. The lot is filled with about 50 cars and staffed by six sales agents, two mechanics and one finance manager.

Underwood’s goal is to double his annual sales over the next two years by targeting the 7,000 or so small businesses in the Birmingham area. He also plans to implement a quarterly mailing campaign that will advertise his business at an annual cost of $8,000-$ 15,000.

Anthony Underwood Automotives, 5130 Bessemer Highway, Brighton, AL 35020 205-424-4033

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