Welcome to this week’s episode of Used Cars Weekly, the original CBT News show dedicated to bringing car dealers best practices and tips for the used car department, in-depth dealer interviews, hands-on dealership strategies, and vendor analysis. Today, host Jasen Rice, founder of Lotpop, poses the question—is your used car inventory running like an out-of-shape athlete?
Over the last two years, used car inventory has been running very smoothly with record-high gross profits and steady volume, says Rice. But this also means that the used car department has likely picked up some bad habits. However, it seems like the used market is slowing down, and these bad habits could have long-lasting effects on the dealership if not dealt with properly.
Now is the time to get back to the basics of used car inventory management, adds Rice, and it could take some time to get back into tip-top shape. It could even take three to six months to correctly deal with aging issues in your inventory. Then, it might take another three to six months to fine-tune your processes. If a dealer or used car inventory manager decides to wait on getting their department in shape, they will start to feel the pain. The department is already two months behind the curve by that time, explains Rice.
Olympic athletes don’t decide to get in shape one year before the competition. They do it consistently year after year. So, the car dealers who stay disciplined will come out ahead of the dealers who are complacent in the profitable market. If you want to start getting your used car management in shape now, Rice says to ask yourself the following:
- How fast are you getting cars in and out of service with photos and descriptions?
- Is your virtual lot walk up to date? (See the Used Cars Weekly episode on virtual lot walks here)
- Does your current inventory match your sell rate?
- Which age buckets are having problems?
- Are you following up on your leads?
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