1. Average gross per unit will come down. (Doesn’t mean it has to be that way at your store.)
2. Use of personal devices by consumers to shop vehicles and prices will increase.
3. Nice used cars will be scarce.
4. You will struggle to make ANY gross on aged units. (Well, duh, you’re not using my Life Cycle Management process)
5. Finding sales people who want to work the hours and be paid on gross will become even more difficult.
6. Maximizing the use of software and technology in your dealership will challenge you.
7. The franchises you represent will put more expenses on your side of the table.
8. The manufacturers will increase the pressure on you to hit market share.
9. You will accept aged units as a necessary evil of the automobile business.
10. Your average cost per unit in stock will go up.
11. You will become more dependent on your used car department to save your new car department.
12. The amount of water in your used car inventory will increase.
13. Your dealership will be sued because someone didn’t “just handle it.”
14. Your CPA and legal fees will go up.
15. You will waste 50% of your advertising dollars and you won’t be able to figure out which 50%.
16. F&I income will feel stress from the regulators.
17. Improving recon time for used going through your shop will be a high priority. (You will talk about but not fix it.)
18. You’ll hire managers from the outside because you haven’t developed your own people.
19. You will wholesale some used cars that you should have retailed.
20. You’ll think about hiring me, but you’ll talk yourself out of it…again.

Well duh. Most of these are always true. Some things change. Many don’t.

Happy New Year to you too. That’s all I’m gonna say, Tommy Gibbs

You’ve tried everything else to move that aged inventory. Might as well try this:

“Mark Down Tent.”

A “Mark Down Tent” is not a permanent fixture. It’s to be used from time to time when you are trying to unload problem cars. You know those units that you all of a sudden discovered you are killed in and have had hanging around way too long.

Put up a tent that can hold 3 or 4 units, as close to the road as possible. If permissible, hang banners around it that say “Mark Down Tent” and use the little signs that you can stick into the ground with arrows to the “Mark Down Tent.”

Promote the “Mark Down Tent” in all your ads including your website. You might want the receptionist to answer the phone, “ABC Motors, have you heard about our Mark Down Tent?”

Using a marker, start off by putting a very, very high retail price and the date on the front windshield. You will be marking the price down each day by $500, with the date beside the new price until sold.

Draw a line through the old prices and dates. The sales person’s commission on day one will be $2000. Each day that you mark the car down by $500 the sales person’s commission will be reduced by $100.

Now don’t panic. I said to start off with a really high retail price. If you get to a point where you are uncomfortable with the pricing going too far south you can always pull it from the tent.

The idea is to create a sense of urgency with both the customer and the sales person to take action.

The reason you now need to put cars in the tent is you didn’t have a sense of urgency soon enough in the first place. That’s all I’m gonna say, Tommy Gibbs

There’s an old adage that you make the money on a used car when you buy it or trade it. Buying it or trading, it’s all the same thing.

For the moment, I’d like to take issue with that statement. Of course, it’s true you have to be in a unit right, but the most important things that impact your profit are the decisions you make about the unit once you own it.

Sometimes we make a bad decision on what to keep and what to wholesale.

Sometimes we spend too much on it. Sometimes we spend too little.

The biggest problem dealers have is that they don’t have a defined strategy of how they intend to market the car.

They price it too low.
They price it too high.
They don’t change the price fast enough.
There’s no sense of urgency to get it on the lot and on the web.

If you want to make more money on your used cars then make sure you have a defined strategy on what you’re going to do with it. Retailing or wholesaling isn’t a strategy. That’s a disposition decision.

A strategy means you understand what you’re dealing with and you have a plan to get it retailed.

Think of the potential. You buy them right. You strategize them right. That’s when you make the most money.

That’s all I’m gonna say, Tommy Gibbs