How long are your vehicles sitting on the Lot?

Drew Bettiol

What is your rule of thumb for turnaround on New and Used cars? we have some units that are over 200 days old. Just wondering if that is at all normal.

Derrick Woolfson

We have some inventory that is the same boat, but most of those units typically do not do well in our market, etc. For units that are of that age, we gut the prices, and/or try and D/X them out. 

Tony Ferrigno

I would say as far as used cars go you shouldn’t have anything that old.  The longer they sit the more it cost wether it’s floor plan cost or anything else they will nickel and dime you.  New car market is market is much more tricky in my opinion because the manufacturers may be to partly to blame.  With interest rates being the highest they have been in years high dollar vehicles will kill you.   It’s a hard game to play I have a couple new 19 Silverado trucks that are 250 days old.   A new model comes out so you try and order them but Chevrolet decided to not even adv it for 6 months after they started hitting lots and have done a terrible job with incentives on them as well especially for returning lease customers.  Guess at the end of the day as units creep up in age you have to be constantly making sure you are doing everything from marketing them correctly and adj the prices to keep them from aging to much.

Victoria Dillabough

We have some that sit in that mark too - when this happens, we offer a price reduction and feature them on our social, boost them on our Trader, Kijiji, etc! 

Sam Salem

I don't think TOL is a huge factor to stress over IF: 1) Car is paid cash 2) Margins anticipate the delayed sale 3)It's a semi-unique unit with a relatively low supply.  

That being said, lot space is a valuable commodity nowadays. Stores are fighting to cut and maintain low overheads; which traditionally means (for independents) indoor warehouses that'll have your cars bumper to bumper.

End of the day regardless of the unit, and it's MDS. You should be able to manipulate its turnover or MDS by aggressively retailing it.    All my cars have a 45 day window, so I simply take 45 days/6 working days a week=7.5 weeks

From there I calculate Advertised price and actual retail price (which I derive from loan value @approx $2500 above for units under $45k) 

0-7 Advertised Price

7-14

14-21

21-28

28-35

35-40 Retail Price

 I hope this makes sense, but the sooner you force those two figures to collide, the quicker your turnover will be. Sounds simple enough, but there should only be a sense of urgency their on vehicles with a 65-70+ MDS. You need to take a car that's statistically proven to take longer to sell and light a fire under it.  The reason most of those vehicles take so long to sell is due to the poor book out value which then forces you to have to wait for that special customer with a great credit score and the cash down to match.  The closer you price to book value, the less likely your customer will need to have both a 750 and 2k down.  Instead, you've now doubled the demographic essentially increasing its turnover. 

 

Sam Salem

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