Why aging policies are costing your used car department money

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, as well as vendor analysis. Today, host Jasen Rice, founder of Lotpop, continues his conversation with Tommy Gibbs, President of Tommy Gibbs & Associates.

Rice believes that dealers are causing their own gross problems. Since some dealers don’t have an aging policy, they are driving down grosses. When you begin to look at the top 5 cheapest price cars, those cars have been on the lot for between 90 to 160 days. He believes that if dealers stick to an aging policy, that’s where they can bring gross.

While Gibbs agrees, he says, he doesn’t understand why dealers let cars age. He thinks that car managers should have a cut-off time of 60 days, figuring out how to retail cars. Rice explains that if dealers aren’t stocking up, they may get behind on selling inventory.

When it comes to high average investments, Gibbs says dealers should stay focus on their ten most expensive units. Gibbs continues to reiterate that those units are possibly the ones that can hurt people the most. With those cars, they are competing with the newest ones on the lot.

Rice wraps up the conversation by stating when things start to shift, it’s going to hurt a lot of dealers if they don’t discipline themselves and create an aging policy.

To catch part one of this discussion with Tommy Gibbs, click here!

Did you enjoy this episode of Used Cars Weekly? Please share your thoughts, comments, or questions regarding this topic by submitting a letter to the editor here, or connect with us at newsroom@cbtnews.com.

Be sure to follow us on Facebook and Twitter to stay up to date or catch-up on all of our podcasts on demand.

While you’re here, don’t forget to subscribe to our email newsletter for all the latest auto industry news from CBT News.