3 Ways To Turn Your Average Inventory Cost Into Advantage

06.10.2015

It’s becoming more critical for dealers to pay close attention to the average cost of their used vehicle inventory. I say this for three reasons: First, today’s market can lead dealers to believe that managing your average used vehicle cost isn’t important. After all, cars are more expensive and, if you want to play in [...]

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A Case Of One Step Forward, Two Steps Back

05.29.2015

Mistakes happen in used vehicles. Simply put, there are too many things that could go wrong, for everything to always go right. That’s what makes the following story from a used vehicle manager so troubling. Last December, the manager made a decision to stock up on inventory. He had no choice but to acquire the [...]

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3 Ways To Boost Used Vehicle Profitability While Selling More Cars

05.28.2015

  In its 2014 report on dealership financial performance, the National Automobile Dealers Association (NADA) highlights a disturbing trend in used vehicles. The NADA report notes that franchise dealers enjoyed a 6 percent increase in used vehicle sales compared to 2013—an increase similar to what dealers saw in 2013, compared to 2012. Yet, net profits [...]

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A Quick Look At Closing Ratios And “Closers”

05.22.2015

I’ve been asked recently for benchmarks on closing ratios for dealers. The frequency of the question, I suspect, follows the fundamental change in the way today’s new/used vehicle shoppers zero in on a potential purchase. As most dealers are aware, shoppers do the bulk of their homework and research online. On average, they visit fewer [...]

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3 Ways Packs Prove Problematic For Dealers

05.15.2015

  There’s no question that dealers like packs. But packs have become increasingly problematic for dealers, sometimes in ways they fail or refuse to see. I recently asked a group of dealers to share how much they packed their used vehicles. The responses ranged from $0/per car to $1,200/car. I then asked the dealers at [...]

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Dealer Enjoys Early, E-Commerce Success

05.08.2015

General Manager Todd Long dares to be different at O’Neill Honda in Kansas City. Before he took the job in December 2013, Long mystery-shopped the competition. “It was the epitome of the ‘90s all over again,” he says. “Nobody’s outside. Nobody’s helping you. No manager TO. The MSRP is the price. His findings convinced him [...]

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3 Lessons From Top-Performing Used Vehicle Retailers

05.04.2015

I was struck by several take-aways from Automotive News’ Top 100 Dealer Groups Ranked By Used Vehicles report published last week. The dealer groups’ collective performance keeps getting better. The report says the groups saw a combined 9.9 percent gain in retail used vehicle sales in 2014, 4 percent better than the industry as a [...]

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3 Ways To Eliminate The Used Vehicle Manager’s “Double Curse”

04.29.2015

Some used vehicle managers carry a double curse. The first curse is their absolute focus on average front-end gross profit. They’ll say, “I can’t change this price because there won’t be enough front-end gross,” or, “I can’t buy this auction car because there won’t be enough front-end gross,” or, “I can’t offer the customer what [...]

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Factory Pricing Decision Will Test Dealership Efficiencies

04.22.2015

Here we go again. Another factory messing with dealer margins. This time it’s Fiat Chrysler, according to an Automotive News article. The upshot: The factory is raising invoice prices by 1 percent, while leaving its Manufacturer’s Suggested Retail Prices (MSRP) unchanged. The end result, of course, is less available front-end margin for dealers. Such is [...]

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3 Ways To Confront The Boogeyman In Used Vehicles

04.21.2015

A dealer recently took issue with my assertion that the used vehicle business has been suffering from margin compression. “Dale, we’re averaging $1,400 per vehicle in front-end gross,” the dealer says. “That’s a little less than we made seven to 10 years ago, but it’s not a lot less.” The dealer’s comment underscores what I’d [...]

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