I’m talking with a dealer the other day who needed some help with his used car department. Based on the conversation he is struggling in both new and used car sales.

It’s not unusual when you struggle with one you struggle with the other. There are exceptions to that rule as there are some dealers who see themselves as being a “new car dealer” and some who see themselves as being a “used car dealer.”

For years the have made money doing it that way and I’m not about to say they are wrong. I will say they could have made even more money had that not been a single minded car dealer.

The fact is you can be both. When the two departments are managed correctly they compliment each other. When they are both rocking they help to fire up the the parts, service and body shop business which and the bottom line explodes.

I looked at the aforementioned dealer’s website and here’s what I discovered. He had 87 units in stock. Of the 87 there were 67 units that had a retail price of $29,000 or more! 11 others over $14,900 and he had 9 under $14,000.  According to the dealer more than have of his inventory is over 60 days old. Ok, rock star how much water do you think he’s got sitting there?

This picture is not all that unusual. For the life of me I can’t figure out why dealers let this happen to them. Most of this dealer’s inventory happens to be 2010 and 2011 models and a lot of the inventory was purchased from Enterprise.

I’m thinking Enterprise must have some really awesome sales people working for them because more often than not when I see these problems Enterprise has played a role in it.

Oh, I’m not blaming Enterprise because what needs to take place is dealers need to have the discipline to say “NO” to “EASY.” Buying these types of cars is easy. Heck, I did it back in 1902 (not really 1902, it’s just a redneck saying) when the factory was selling program cars by the thousands. I stood there with my hand in the air like everyone else. I’m living proof that it didn’t take any real brains to buy those cars.

I hate to be the bearer of bad news for this dealer, but the reality is he only has 9 units in his inventory that fits the pocketbook of the majority of used car buyers. The retail sweet spot for used car sales remains around $15,000 or less. That doesn’t mean you shouldn’t have some more expensive cars in stock, but it does mean that if you’re gonna get to play the game then the majority of you inventory cannot be over that number.

I realize we live in a high tech world and today’s automobile dealer has a lot on his/her plate. But, so much of this business remains common sense. Common sense tells you the make up of this dealers inventory is a formula for disaster.

It’s a really bad start when you have made really bad purchase decisions and then you compound the bad purchase decisions with bad inventory management. Two wrongs don’t make a right.

Two wrongs make for a really bad start. That’s all I’m gonna say. Tommy Gibbs