But What?

Anything you say before the word but is totally meaningless, a waste of time and energy. Here are some examples:

“I have a great used car manager, but I can’t get him to understand why ROI is important.”

“Sam is a really smart guy, but he just won’t get with the program.”

“Dave is a great buyer, but we never make money on the cars he buys at the auction.”

“Marsha is a great used car manager, but we have a lot of stuff over 60 days old.”

“I know we need a photo booth, but we don’t have enough space.”

“We have prices posted on our used cars, but they don’t match the prices we have on the Internet.”

“My used car manager is a great closer, but he doesn’t understand how to price used cars.”

“Curtis is a nice guy, but makes poor buying decisions by buying too many high dollar cars.”

“Bob is a hard worker, but he makes a lot of stupid decisions.”

“My used car manager is one of the best in the business, but we’re only getting 5 turns a year.”

“Carol is a great service manager, but I can’t get her to understand the importance of used cars to our overall profitability.”

“My general manager is super smart, but his people skills are horrible.”

“My used car manager is really tight with all the wholesalers, but I question why we sell them so many units.”

Using the word “but” is just a way of you making excuses for people and things you have failed to take action on.

That’s all I’m gonna say, Tommy Gibbs

The Ticking Time Bomb

Most dealers and managers have come to understand that speed is critical when it comes to making money on used cars.

If you are committed to 60 days or less (which you should be), then any days in the assigned life-cycle of a unit when it’s not available for sale is a killer.

The question often comes up, “When does the clock start ticking?” Does it start with the actual day you own it, or does it start when the car goes on the lot/online?

The issues that often come up are the delay in getting vehicles from auction sites and those units we can’t sell for legal reasons such as we don’t have the title as required by law in some states. There are certainly times when a needed part is delayed and/or a vehicle spends weeks in the body shop.

Let me make this as clear as I possibly can. It starts the moment you own it. Period. No exceptions, no ifs, ands, or buts.

If you want to trick yourself by assigning a different date once the car’s online then go ahead; it’s your store you can do what you want. But, what you can’t do is change the math.

It is what it is. It’s a depreciating asset. The clock starts ticking the minute you own it. Do the math. The ROI is going south.

It’s a ticking time bomb. That’s all I’m gonna say, Tommy Gibbs

Two Lists

One of the things I encourage dealers and managers to do in my workshops is to sort their used vehicle inventory by cost or investment, with the most expensive units at the top. Then I teach them 4 specific ways to attack their 10 most expensive units.

One of the more interesting but not surprising things we’ve observed over the years, is that if you lay your aged inventory side by side with your 10 most expensive, the two lists have a lot of the same units.

Another fact is that the longer a unit stays in your inventory, the less gross and the less ROI you make.

You would think the more money you have tied up in a unit, the more money you would make. If you actually think that, you would be wrong.

Adding to that problem is another well-known fact that the longer the more expensive units sit, the worse the ROI is going to be.

So go ahead and lay your two lists side by side and validate what you already know.

Here’s one final fact. We often know things, but look the other way. When you look the other way, you’re just being stupid. Don’t be stupid. That’s all I’m gonna say. Tommy Gibbs