Group 1 Automotive's earnings rose to new records thanks to an increase in sales of used cars, Earl Hesterberg, the firm's president and CEO, told CNBC on Thursday.

Same-store used car sales in the U.S. were up 11 percent in the quarter. "That's a number I've never seen before," Hesterberg said on "Power Lunch."

Sales of new vehicles also rose, 7.4 percent.

The company, the third-largest auto retailer in the U.S., beat Wall Street's expectations Thursday when it posted a 44 percent increase in quarterly profits.

Hesterberg credits the increased sales in used vehicles for the jump and said internal measures were put in place to promote used vehicle offerings. Those included focusing on lower-priced used cars that were once sent to auction and adjusting the amount of money salespeople can earn from selling used cars.

"Typically you make a little bit more margin on a used car than you do on a new car," he said.

"It's a good business," Hesterberg said, adding that sales have typically been higher in larger vehicles such as trucks and SUVs.

"In markets like Texas, for us it's as much as 80 percent truck and SUV ... [in the U.S.] overall, probably closer to 70 [percent]," he said. "I wouldn't say sedans are dead, but it's certainly a shrinking part of our business."