Cox Cares

by dpollak on 08/28/2015 · 0 comments

 

I often say that Cox is one of the best companies to work for in America. One of many large examples is evidenced by the below note from Jim Kennedy, Cox’s Executive Chairman and Cox family member. In addition to genuinely caring and supporting fellow Cox associates in times of need, the family and organization commits significant resources to the environment, social causes and a multitude of other worthy initiatives, institutions and organizations. We should all be proud to support and do business with an organization that commits itself to making the world a better place.

CERF w URL Cox Cares

 

Dear Cox Colleagues,

Ten years ago, in the wake of the overwhelming devastation brought by Hurricane Katrina, we established the Cox Employee Relief Fund (CERF) to help employees rebuild their lives. Since then, the fund has provided $4 million in employee grants, assisting more than 1,700 employees facing critical financial hardship.

But it’s so much more than these impressive numbers. It’s about truly being able to help our fellow employees and their families when they need us most.

Through the years, CERF has grown to become a 501(c)(3) charitable organization supported by employee donations. Its mission is to assist employees and their immediate families impacted by life’s setbacks, including natural disasters, injury or illness, or loss of a family member. CERF has aided employees with funeral costs, unexpected medical bills and rebuilding their lives after natural disasters such as Hurricane Sandy.

Thank you for your continued support. I am extremely proud that together we can support our colleagues and make a meaningful difference in each other’s lives.

Thank you,

Jim Kennedy

Chairman

 

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Where have you been?

by dpollak on 08/24/2015 · 2 comments

 

Over the weekend I received the below question from a dealer. My reply follows.

3QA Where have you been?Q: Can we create a feature in vauto that shows the sales history and results on every car like the Manheim results? This way when we appraise a car we will make a better decision by knowing when we sold it and how much we sold it for.

A:  For the sake of my own sanity, I will assume that you are either new as a vAuto user and/or new to the used car business. This is because years ago I launched vAuto against two well-established, well-funded inventory solution providers that made stocking, appraising and pricing recommendations based on historical transaction experience. At that time, the industry was convinced that historical experience on the used car lot was good science for making decisions. I challenged that notion with the belief that unlike standardized packaged goods, used vehicles and their values perform predictably in the context of the live market. Put another way, past experience is not a reliable indicator of future performance on the used car lot.

Although it took many years, authorship of three books and much effort, today it is fair to say that most of the industry has adopted a methodology of pricing, appraising and stocking, largely, if not totally on competitive information derived from a local live market. vAuto’s market leadership, as well as the ever growing majority of Velocity-minded dealers, validates the correctness of this approach. Accordingly, although we always listen intently and often respond accordingly, we will not provide historical information in vAuto as a means of assessing vehicle values or desirability for inventory. Having said that, I respect the fact that there are still some who believe otherwise, and for those individuals or dealerships, there are still some inventory management products that continue to offer historical information as a means for decision support. Much thanks for your question.

 

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I’m seeing far too many 2014, even 2013, model-year new vehicles in dealers’ current inventories.

Yes, those cars. The ones nobody wants to talkmodel year end image 300x108 Tackling The Problem Of Older Age New Vehicles about. The ones that mean tens, if not hundreds, of thousands of dollars in unproductive capital for many dealers.

In my time as a dealer, it was pretty rare to carry last year’s cars. With Cadillac, we could count on fall incentives to help us clean out our inventories. We generally considered it a failure if we hadn’t eliminated all prior-year vehicles by January 1st.

It’s unfortunate those days appear to be long gone.

Dealers offer several reasons for keeping these cars—their factory partner sent a dud, they got it wrong when they ordered or they simply can’t find a buyer.

There are other factors that contribute to aging new vehicles. Factories introduce new-year models at different times during the year, not just in the fall. In addition, factories use incentives throughout the year to achieve their market share objectives, not necessarily a dealer’s need to clear out prior-year units. The end result: The responsibility to mind and manage older-age new vehicle inventory increasingly fall’s on the dealer’s shoulders.

Interestingly, however, dealers don’t seem concerned that the presence of older-age new vehicles is hurting their performance and profitability. Some believe that, unlike used vehicles, new cars do not depreciate. If you follow this thinking, a 300-day-old new vehicle is as appealing and fresh as the same vehicle that just came off the hauler.

When I take a closer look at these older units, I often find they are priced the same as newer units—a sign that the dealer is banking on finding a buyer willing to pay up to own the older car. But I have to ask: In this day and age of ever-greater pricing and product transparency, does anyone really believe such buyers exist?

Some dealers recognize that older-age new vehicles poses the same problem as old-age used vehicle inventory. As time goes on, these vehicles become less and less appealing to buyers, and their ability to deliver a sufficient return on investment diminishes at the same or greater rate.

When I mention this dynamic to dealers, some disagree. “Dale, you’re wrong,” they’ll say. “New cars don’t spoil like used cars.”

On some level, these dealers are correct. In today’s market, the prime retail window for used vehicles is 45 days or less. One could make a case that the shelf life for new vehicles is twice as long.

But even by this standard, you really can’t argue that a 2014 unit has little luster as a new vehicle to today’s buyers—and it’s unquestionably counter-productive from the dealer’s investment perspective.

My advice: Stop hoping for the buyers who probably won’t come. Price your 2014 and older vehicles to retail right away. Take the loss today, if necessary, and accept it as a lesson learned to shape a more profitable tomorrow.

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  Following is an email from a friend and customer about increasing his inventory as we enter the summer slowdown. Good afternoon Dale. Hope all is well with you. Last month was a down month for my used car department. Sold 62 at $1200 per copy. I had around 15% of my used inventory as [...]

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