GM uses trade-ins to steer used-car shoppers toward new vehicles

Automakers generally earn more from selling new vehicles, while dealers can make substantial profits reselling trade-ins as used cars. Strong used-car prices have made that business attractive, but the growing presence of online sellers has added pressure on traditional dealers and other established players.

Ivan Feinseth, a partner, chief investment officer and director of research at Tigress Financial Partners, said online shopping has transformed retail, while the auto industry has been among the slowest sectors to adopt digital and online sales. That shift has changed how customers shop for cars and sharpened the contest for buyers who might otherwise choose a used vehicle.