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Pollak DaleIn addition to being a best-selling author on Used Car Sales in his book Velocity, Dale Pollak is the chairman and founder of vAuto, Inc., a company that provides retail automotive dealerships with a better way to appraise, manage and price their pre-owned vehicle inventory. In addition to serving as vAuto’s spokesperson, Dale is responsible for strategic planning and development.

Prior to vAuto, Pollak served as VP of Sales and Business Strategy at Digital Motorworks, the market leader in data integration and application development for OEMs, mega dealers and third party providers. Pollak helped build the company from inception to its successful acquisition by ADP in 2002.

Pollak received his B.S. in Business Administration from Indiana University and is a graduate of the General Motors Institute of Automotive Development. Pollak also earned a law degree from DePaul University’s College of Law, and is a four-time winner of the American Jurisprudence Award for top performance in his class.

Dale Pollak is one of the leading authorities on automotive dealership management strategies. Tap into Dale’s experience, insight and knowledge.

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Contact Dale: dpollak [at] vauto.com

  • John Moore

    How much does price really matter? Has there ever been any type of regression analysis to determine the ideal pricing point? How much does it take to get a large enough percent of the market to travel? If I lowered prices $500 could I expect to sell 20% more?

  • John,

    A regression analysis on price would only work if there were no other extraneous variables influencing a purchase decision for a given vehicle. Obviously there are many unique differences inherent in every used vehicle, as well as a myriad of ever-changing variables in the macro environment at a given moment in time. Accordingly, no such luck as to have something as simple as a regression model for used vehicles.

    Once you understand that we are working with incomplete and imperfect data, the question comes down to what factors most drive price sensitivity of a particular vehicle. I believe that there are two primary relevant considerations. The first is the physical attributes, aesthetics and quality of the vehicle, best assessed by the discerning eye of an experienced retail automotive professional. The second consideration is the relationship of the vehicle’s supply and demand in the relevant market, best measured by its market day’s supply. When considered in tandem, these are the variables that most reliably influence a vehicle’s price sensitivity. Thank you for your thoughtful question.

  • Jimmy

    Hello Dale, my question was about sourcing. What do you think about the new ”mobile” auctions that have been on the rise for several years now? It is very convenient for a seller because the vehicle stays on the lot until it is sold, no transportation fees are attached to it as well. the buyers like me on the other hand, must log in into more than 8 platforms to find the vehicles we need. At first, I was sourcing on ADESA and Ove via vauto, trimmed the vehicles on an excel spreadsheet and then could easily find 10-15 ”buy it now” units. but now I need to log in on all platforms which tripled my time of research and evaluation. Any tips ?

  • Jimmy,

    Thanks for your note. Have you looked at Stockwave? I created this tool to solve the sourcing challenge that you’ve referenced. The tag line is “Surprisingly Simple Sourcing.” Let me know if you’d like for me to have someone contact you.

    Much thanks.

  • sarah

    Hello Dale,

    I’m a stuff from a Chinese Company of the used-car industry, and I have read your book ,“Velocity 2.0”. Your thoughts on the industry are very appreciated by my boss, collegues and I. We love it !

    Those new metrics, ideas and stories are a kind of shock&inspiration to our dealers, so we hope more uesd-car managers could realize the problems on their work.

    Here, I sincerely apply for your authorization to allow us to translate the book into Chinese, and send the Chinese Version to more used-car dealers as a free-learning material. Would you approve my little request? Thanks so much~

    I’m looking forward to your reply.

  • Jimmy

    Hello Dale,

    with a limited capital of 450,000$ should I limit my investment per unit in order to get more inventory, or should I focus on buying fast moving units even though the investment per unit is bigger?

  • Jimmy,

    Thank you for the question. With respect to the type of inventory you should stock, my first thought is to determine what is the brand of your retail operation, or put another way, where is the opportunity in your market? Are you in an upscale, high-income area where luxury cars do very well or are you in a sub-prime market? Is the promise of your brand an expensive transportation or is it utility for commercial companies? In other words, let’s start by determining your market needs and expertise.

    Once you have yourself in the right ballpark, now we can talk about what types of vehicles you should stock within the segment of your dealership’s brand promise. My approach would be to stock the vehicles consistent with the brand promise of my dealership that have the lowest market days supply and that can be purchased for money that allows you maximum profit opportunity. You should begin to get the idea that it is not a matter of expensive or inexpensive units, but rather, what is right for your market with the lowest market days supply that can be purchased for the right money.

    Once these considerations have been made, it is generally true that higher dollar units are riskier and often turn slower than less-expensive ones. This factor alone, however, should not be the primary driver of your stocking consideration, but just one of several to be considered a bit later, after you’ve addressed the aforementioned. Again, thank you for your question.

  • Lance Law

    Hi Dale thanks for your insights. Here in New York we have to deal with lemon law warranties. In light of the velocity principals how do you suggest us dealers in NYS mitigate the risks associated with come backs when reducing our margins? In other words, we are accustomed to leaving a little “padding” for any repairs that are needed if the car is returned. In new york, regardless of whether the repair is under warranty or not NYS will rule on the side of the customer which usually has the dealer picking up the tab. With the market as tight as it is, getting the margins to cover that plus make a profit are getting narrower and narrower as you have stated in your books.

  • Lance,

    I understand your dilemma and feel your pain. Having said that, wouldn’t it make more sense to properly estimate any necessary repairs prior to appraisal and only purchase the vehicle for the amount that would adequately cover necessary and anticipated repairs? Once done, make those repairs up front to mitigate the risk of a comeback repair. In other words, account for the cost of the repair in your acquisition appraisal rather than your retail price. If the vehicle’s condition represents a significant risk, and you cannot account for it in the purchase price, then don’t buy the vehicle, or in the case of a trade, consider whether the entire transaction is worth the risk. The bottom line is that risk premiums that are built into asking prices never end up working well for dealers.

    Regarding opportunities to learn, I would recommend reading my Velocity series of books, attending regional Velocity workshops, as well as working closely with your vAuto performance manager. Of course, feel free to reach out to me directly if I can be of additional assistance, and much thanks for your thoughtful question.

  • Jimmy

    Hello Dale,

    I read a lot of articles about autonomous vehicles, car ownership being in decline with ride sharing or car subscriptions and I keep wondering myself, is this a serious threat to car dealerships? Do you think the retail market will eventualy come to an end ?

  • Jimmy:

    Thank you for the softball question . To your credit, your query zeroes in on what I believe will be a critical moment for retail automotive—when autonomous vehicles and ride-sharing converge.

    There’s no question in my mind that this convergence will come, and it will be disruptive for dealers. My instinct also says the convergence will probably happen faster than many prognosticators think.

    I’ve seen a couple studies that suggest the convergence will ultimately reduce the number of dealerships and the number of “retail” sales—with larger, more efficient dealers getting a lion’s share of the remaining business.

    But I would add that none of the studies I’ve seen accounts for a car dealer’s innate nose for opportunity and deep survival instinct.

    I see and hear from more dealers who are saying “we’ve got to disrupt ourselves before disruption comes to us.” These dealers are experimenting with ride-sharing and subscription services, adopting digital retailing models and pursuing other ventures.

    I applaud these efforts because they represent a shift away from a dealer’s traditional role of selling cars to providing convenient, customer-focused transportation services. They also signal that while the car business will ultimately look different, dealers will still have a seat at the table, even if they need to build it.

    I hope this response helps. I appreciate your questions and the attention you’re paying today to tomorrow’s business. You’ve set a good example for all of us to heed.

  • Jerry Hollifield

    When setting goals to improve used vehicle turn, should you focus on entire inventory or just retail in vAuto?

  • Jerry,

    Turn for both wholesale and retail are critical performance indicators for success, they must, however, be measured independent of each other. Retail turn must be at least 12 times per year and wholesale turn must be much faster.

  • kdh4321

    When calculating Annual Inventory Turn are Wholesale sales included or is it based strictly off Retail Sales?

  • vAuto allows you to calculate it either/or, or combined. For the purpose of generating profit, however, a dealer must turn retail inventory a minimum of 12 times per year, i.e. once a month on average.

  • Chris S

    How do you see dealers positioning themselves in the every changing lending landscape with subprime customers, and where inventory is going to play a key role in how lenders look at vehicle age, type, and mileage.