Everyone has problem cars from time to time. You know the ones I’m talking about. The ones that want to stick around forever. The ones you haven’t yet found a buyer for.

But where did they come from? How did they all of a sudden end up on your lot? Did they just fall out of the sky?

Can you imagine how much better off you would be if you could identify problem cars on day 1 vs. day 61? Suppose you had a strategy in place to deal with them sooner rather than later?

The number one problem I see in the industry is we just don’t pay attention. We don’t pay attention soon enough. By the time we realize we have a problem, it’s too late.

Take the time to do a “trade walk” which includes all purchase units, and be blatantly honest about what you’re staring at.

Then put a strategic plan in place to deal with the more problematic units. If you did nothing more than that, you’d have a lot less units falling from the sky, hitting you in the head and giving you a headache.

And, you would have a lot better bottom line. That’s all I’m gonna say, Tommy Gibbs

There’s a book out by Jason Jennings and Laurence Haughton that has the perfect title for the automobile business, “It’s Not the Big that Eat the Small…It’s the Fast that Eat The Slow.”

Some new car dealers believe the definition of Velocity is:

“Velocity-a method of giving your cars away so as to impact your gross to a point of a substandard amount that will make you want to throw up your hands, beat yourself over the head, and barf.”

I have a new definition for the word velocity; the whipping boy of the auto industry that can be blamed when we use software pricing tools as the Bible, don’t use our brains and don’t use the tool as it was intended in the first place.

You can make one of two choices:

1. Hold high gross profit per unit.
2. Do lots of volume at a little lower gross.

Which way do you think is going to pile up the most gross to pay the bills at the end of the month?

Dealers have been known to complain that when they went on the velocity method of pricing their used cars to market, their grosses went south. Well duh, of course they did.

What actually happened is those dealers had let their inventories age on them and when they finally priced them to market they got crushed.

Software won’t save you. Having discipline and using your brain will save you. There will be pain unless you use your brain. I like that, “Pain, if you don’t use your brain.”

That’s all I’m gonna say, Tommy Gibbs

So, how was your June? How have your first six months been? It’s July. Half the year is gone. Kinda scary isn’t it?

Some of you have had a great first half. Some of you, not so much.

Some of you have been running full speed ahead. Some of you have been dragging through the sand.

Something has been holding you back. There may be some legitimate excuses, but maybe you just had the wrong plan in place. Just because you had the wrong plan does not mean it’s too late to fix it. You’ve still got 6 more months to go.

Those of you who have had a good first 6 months need to be cautious of becoming complacent. Even though things have been going well, you would be very smart to review how you can make things better as you tackle the second half.

Everything we do is about choices. You can choose to let things be as they are or you can choose to dial it up a notch or two.

To do so means to review your plan and the strategies you have in place. And, make the changes that are necessary to get you where you know you need to go. That’s all I’m gonna say, Tommy Gibbs

Every human holds certain prejudices. We’d like to think we don’t, but we’re only human.

The type of prejudice I’m talking about is how you treat certain customers. Yes, I know this is pretty deep, but it’s something you should be very concerned about.

On the one hand, you have some customers that you roll out the red carpet for. You treat them like gold (which you should do for all) and you even give them special discounts or coupons from time to time when it’s not even necessary.

Sometimes the ones that you treat the best are the ones that only come to see you once every 6 months or so. With this un-loyal customer you do everything in your power to get them in and out of your shop as soon as possible and often give them a free car wash. In the end, these customers are not all that loyal to you and will drop you in a heartbeat for a cheaper deal down the street.

Then there’s another customer, a very loyal one that you don’t treat quite as well. It pains you to give them a discount and you will often send them to the back of the service line.

No free car wash for these customers. If anything, you look for a way to charge them more, let alone serve them up discount coupons. The hours per RO with these customers is more than twice what it is with the others. What’s funny about this customer is they wouldn’t think of doing business with anyone but you. They are loyal to you beyond belief, but you treat them like crap.

Let me introduce you to these two customers that you show prejudices to every day.

Meet your retail customer and your used car department. That’s all I’m gonna say, Tommy Gibbs

There are a lot of challenges in today’s automobile world.

Most of us are always looking for answers.

Could It Be?

1. Could it be that the consumer is using the Internet for the majority of their purchases and therefore is pushing you into a pricing war you would rather not be in?

2. Could it be that you are not managing your pricing correctly? Are you coming out of the gate based on a bucket concept and pricing everything at X amount under market? Are you failing to shoot the moon on a few select units for x number of days before you drop your pants?

3. Could it be the stuff you are buying is like an impossible dream? Are you buying 2015’s with 25,000 to 35,000 miles on them? Really? The only way you’re gonna sell them is to give them away, eroding more average gross profit.

4. Could it be that you and/or your team really don’t understand “Life Cycle Management” and the powerful impact it has on gross and volume?

5. Could it be that you are stocking cars that are way too expensive, so you end up competing with your new car business and selling them at little or no gross just to make them go away?

6. Could it be you are not tracking “GAP?” If you aren’t tracking GAP then how are you to know how much you’re giving away once the customer shows up?

7. Could it be your used cars spend the best days of their shelf life tied up in service and recon?

8. Could it be your presence on Auto Trader and your website is just so, so? When was the last time you looked at the photos on your website?

9. Could it be your management team isn’t really a team?

10. Could it be you have gotten too smart to do a “save-a deal” meeting every morning?

11. Could it be you let a lot of nice trades get away from you because either (A) your managers won’t step up or (B) they wholesale them because they feel the service department is ripping them off?

12. Could it be you have aged units and when you dump them they kill your overall gross?

13. Could it be the deal is screwed up before it ever gets a chance to be turned over to a manager and/or the managers just aren’t taking TOs?

14. Could it be you’re not willing to invest in your team what it will take to maximize results?

Maybe you just need to think about what it could be. That’s all I’m gonna say, Tommy Gibbs