A number of years ago I came up with a saying, “You’re never as smart as you think you are and you are never as dumb as you appear.” Some of you are feeling pretty smart right now.

It could be that you are really smart, or it could be that you got lucky because of a once in a lifetime market shift in your favor. (Dale Pollak’s Article)

And of course there are times when you feel pretty dumb. Even that may or may not be true. You might be a victim of a bad set of circumstances. Some of you have had bad franchises in bad locations or it could be that you’re a newer used car manager that inherited a hot mess for a used car inventory.

Or it could be you’re just dumb.

In any given set of circumstances, it’s important to maximize whatever you have. Right now, you may be maximizing things in spite of yourself or maybe you’ve been smart enough to make some good moves.

It could have been you didn’t know what to do and by doing nothing you got lucky.

The most important thing right now is recognizing where you are, how you got there and how to stay on this magical course you’ve discovered.

Even with all that said, this business continues to be:

All about the basics.
All about the fundamentals.
All about your disciplines.
All about the processes.
All about understanding the data.
All about common sense.
All about your focus.

There’s your roadmap to staying the course. Stay the course. That’s all I’m gonna say. Tommy Gibbs

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 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

If you’re the Dealer, GM or GSM and you’ve got inventory over 60 days old, it’s on you. It’s your fault. You own it, no excuses.

I cannot tell you the number of times the top dog wants to blame the used car manager for the aged inventory, grosses, etc. Really? No, no, no…it’s your fault for allowing it to happen.

Either you let them sell you on all the reasons why they should keep them, or you just weren’t paying attention. Either way, it’s on you.

There’s a retail buyer for every unit sitting on your lot. You just haven’t priced it right enough to make it go away. There are zero excuses for anything being over 60.

Here’s the real excuse; you’re not paying attention. You’re not in the game and you’re not leading anything.

You need to man-up, woman-up and stand up. Look in the mirror and be accountable. Stop blaming the used car manager. It’s on you. That’s all I’m gonna say, Tommy Gibbs

Can you believe it? Does time fly? The year is half over.

How was your June? How have your first six months been? I know it’s been a crazy year, but some of you have had a couple of good months.

You might even be beating your chest a little bit.

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

Maybe in your state and your market, COVID 19 has hurt you or in some cases it may have even helped you.

If you haven’t performed well, 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.

Your other choice is to do nothing. Go sit in your office and stare at the wall. Enjoy your seat and pretty soon it will be over, Tommy Gibbs

Without question, some people are luckier than others. It’s not always true, but some of the time it’s just a fact.

More often than not, luck is a by-product of being prepared.

The more you prepared you are, the luckier you get.

Being prepared means studying your craft.

Being prepared means making some mistakes and moving on.

Being prepared means a willingness to change.

Being prepared means listening to other points of view.

Being prepared means getting outside of your comfort zone.

Being prepared is a constant thirst for knowledge.

Being prepared means having lots of residue on your hands.

Many have the will to win. Very few have the will to prepare to win. That’s all I’m gonna say, Tommy Gibbs

I’m anything but a fan of this pandemic mess, but maybe there’s been a silver lining in this big black cloud.

Many dealers have reached out and said that finally they have gotten their inventory under control and they have no 60-day old units. Hot dang! About time. Now don’t screw it up.

I’m going to share 5 simple things I’ve picked from the many I present in my workshops for you to keep you on track and out of the 60-day old nightmare.

1. Press Your Cost Down-This is probably the simplest and most effective thing you can do to improve your business. Know what your average cost per unit is every day and do what you can to reduce it. If you are at $18,000 today, do what you can to get it to $17,500 and so on. There is no magical number. It’s about keeping the less expensive units and making sure the more expensive ones turn fast. If you figure out how to reduce your recon cost on the cheaper units, then you’ll figure out a way to retail more.

2. Attack the 10 Most Expensive Units in Stock-Make a list each day of your 10 most expensive units in stock. With one exception make sure they are priced really, really right. The one exception is if you know you always make money on a unit that’s on the list then use some common sense, don’t give it away. Consider putting bonus money on those 10 units regardless of the number of days they have been in stock. Sooner rather than later. Make sure the service manager gets a copy of the list each day and create a sense of urgency to get any of those through the shop quickly.

3. Life Cycle Management-There is nothing, absolutely nothing, you can do that will improve all aspects of your used car business more than understanding my process of “Life Cycle Management.” Think Fast, Be Fast-You are working with a depreciating asset. Everything, including decisions on what to keep and not keep has to be done fast. Pull the trigger quickly on units that you are suspicious about. Don’t hang on to them hoping and wishing something good is going to happen.

Early losses are far better than late losses. If you are paying attention and recognizing problem units early in the life cycle then you will have a lot less need to take units to the auction and lose money on them at 45 or 60 days. There are certain “Trigger Points” you need to focus on during your daily “Trade Walk.” Knowing how to use EWR (Early Warning Radar) pays big dividends.

4. Lot Walk-If you do a lot walk once a week with all the members of your sales and management team then without a doubt you will sell more units. The lot walk gets your entire team to know and understand your used car inventory. The more knowledge they have the more they sell.

5. Daily Inventory Pricing-The The market changes every day and so should your pricing. Sometimes you can ask more, sometimes you can ask less. You cannot and will not achieve maximum results by changing prices every 10 to 20 days. Pricing takes intense management. It’s not something you do when you get around to it. You would be far better off if someone priced the car who is not in charge of appraising and buying them.

That’s all I’m gonna say. Tommy Gibbs

When we think of being a leader, we think in terms of a group following our leadership. We think of leading the troops. We think of teaching leadership and coaching skills along the way.

One of the things that great leaders have always found time to do is to be alone. It is often when you are alone that you develop your own personal leadership skills.

Your brain being on fire is a good thing, but you need to have a cool-down period. It’s the cool-down period where you put it all together. Being able to gather your thoughts from being on fire to the “sorting stage” is what helps you to see what the real possibilities are. You become a better leader when you take a moment to pause.

It’s a bit like bodybuilding. If your muscles are going to grow you have to allow an adequate period of rest.

My alone time is generally late at night or early in the morning. I learned this from my business partner, Ashton Lewis, Sr., when he introduced me to the Franklin Planner concept some 30 years ago.

Some of your most productive and leadership “inspiration time” is the time you spend alone. You do your best thinking by slowing down and concentrating. It’s impossible to concentrate with all the multi-tasking that takes place during the course of your daily routine.

Some of your best leading will occur when you are alone. It’s time to be alone. That’s all I’m gonna say. Tommy Gibbs

Many dealers struggle with reconditioning, either that it takes too long to get a car done and through the system or they are paying too much to get it done. Often they complain about both.

I’ve said it before and I’ll say it again, most of these problems can be fixed if the dealer really wants to fix them.

The dealer has the power to fix anything they want to fix. A simple step to improve the situation is to hire a “Chaser.”

A “Chaser” will gain you a few days in recon and reduce your recon expense by a couple hundred dollars per car. Maybe even more on both ends.

A “Chaser” is someone who does just that. They chase the used cars through the system. This is not a high paid position; somewhere in the $3000 range per month. It’s a person who has solid mechanical knowledge, good people skills, attention to detail and the ability to communicate with the sales department and the service department.

Think of them as being in an assistant manager category. It is not the same as having a dedicated service advisor or used car technician.

The “Chaser” has a single-minded focus with no other agenda. They will never let a car sit for even one day while it waits to go from service to clean up. If clean-up is backed up they will start kicking and screaming to find a solution, whereas the service adviser is thinking “next” in terms of his/her own next repair order opportunity to make some money.

The “Chaser” is an employee of the sales department but spends most of their time in service. They need to have a certain amount of approval authority so they can speed things up for you.

I often hear dealers say they already have that, as they give the service department the latitude of spending X dollars per car without having to get approval.

Whatever that threshold is that you’ve given them it’s a
safe bet that you’re going to have a lot of cars bumping that number.

It’s a bit like telling your salespeople that you are only going to accept deals with a $1000 gross profit. You’re going to get a lot of $1000 deals. People take the route of least resistance. You won’t see too many $500 deals and you’re not going see too many $2000 deals.

The “Chaser” needs to have enough mechanical knowledge to know when to hold them and when to fold them. They won’t let the wool get pulled over your eyes.

They are there, in part, to protect and assist the used car department with the ultimate goal of speeding things up. They work for the used car department not the service department.

The “Chaser” is going to gain you some days in recon by doing…well, just that. They are chasing the cars through service. They chase the cars and they push the cars through each station. If things get backed up, they are looking for a solution on how to make it happen.

Many dealerships rely on the used car manager, service writer or, in some cases, the service manager to handle these duties.

And, for the most part they don’t have the time, expertise or focus to make it happen.

You may be sitting there reading this thinking, geez, I don’t want to have to hire any more people. I get that, I understand that. I have a question for you.

How much do you have to save per car in recon or gain in days through recon for the “Chaser” to more than pay for themselves? That’s all I’m gonna ask, Tommy Gibbs

Within the last week or so you have probably seen a rise in used car wholesale prices. Now think about that.

Just 30 days ago the bottom had fallen out and people were talking about dumping inventory and going out and replacing them at lower numbers.

I’m not saying that was wrong. I’m just saying it proves once again, you have to stay on top of what’s going on and be nimble and quick to move at the right time.

As a sidebar, when you have aged inventory you are anything but nimble and quick.

What’s really going on? This business is very simple and it’s easy to understand.

Depending on the state you’re in and if you’ve been able to sell cars or not, you’re running low on new car inventory because the factories have been shut down. Nothing you didn’t already know.

Thus, dealers are trying to supplement their sales by getting into the “Program Car Business.” Call it what you want, but by and large, that means rental cars.

This is going to be interesting to watch. It was just 30 days or so ago that the rental car companies were starting to sell off inventory because they had a ton of units sitting.

Florida is leading the country in the turnaround and as that continues and Disney and others open back up, the demand for rental cars is likely to go up. In other words, they are going to hold inventory, not sell inventory. Less cars. More buyers. Higher prices.

And now to compound the issue Hertz is filing for bankruptcy. There will be some impact for sure, but nobody can predict what or for how long.

And, as other states allow their dealers to get back into the retail business, they too are going to run short of new and used inventories. Pent up demand will come into play.

Everything about our business is about supply and demand, which is all the more reason you need to pay attention, day by day, minute by minute. Having aged inventory means you will never control your destiny.

You can expect one of several things to happen:

1. The market continues with a little kick on the high side for 30 to 60 days.

2. The market finds its “watermark” and settles down quickly.

3. You’re going to overpay for some period of time. When you overpay, all the more reason to understand you still have to turn your inventory.

4. The virus has a surge and the market goes backward until things settle back down.

For the third time in this article; You cannot let your inventory age on you.

The market is always shifting. You cannot shift with it when you have aged inventory.

It has always been and will always be the Achilles heel of the automobile business.

You need to be ready to shift. That’s all I’m gonna say, Tommy Gibbs