There are a lot of common problems when it comes to the used car operations for new car dealers.

But of all the problems and challenges that dealers face, the number one problem is that dealers trade or buy a unit and have a lack of “intent.”

Most would say, “Of course I have intent. I intend to sell this unit and make some money.” That makes total sense, but the problem is, it’s far too general.

That’s like saying you’re going to drive from NY to LA without a plan on how you intend to get there.

How many of you have ever heard the saying, “Every used car has to stand on its own?” If you’ve been around long enough you understand the term and can probably agree with the statement.

That being true, how can you give them all the same shelf life?

How can you not have a specific intent for each unit? Most managers don’t think, “What’s my intent,” when a unit comes into their inventory. They paint them all with the same broad brush, which doesn’t make a lot of sense.

Intent starts with the appraisal and is finalized during the trade walk, where the “final intent” is determined.

If dealership managers would look at each unit and clearly state their intent, they would have fewer inventory problems, turn would improve, and average gross, volume and ROI would go up.

I’m not going to go into the details here in this newsletter, but my life cycle management process gives you the disciplines to determine and carry out your “intent.”

My intent with this article is not to try to sell you something. My intent is to get you to think harder about what your own intent happens to be when you bring units into your inventory.

That’s all I’m gonna say, Tommy Gibbs

If you’re not increasing your volume, you should.

If you’re not attacking ROI, you should.

If you’re not improving your gross profit, you should.

If you’re not pressing your cost down, you should.

If you’re not tracking 30/30, you should.

If you’re not attacking your most expensive units, you should.

If you’re not doing a lot walk, you should.

If you’re not using my life cycle management process, you should.

If you’re not paying attention to look-to-book, you should.

If you’re not doing a trade walk, you should.

If you’re not doing a save-a-deal meeting, you should.

If you’re not on a 60-day turn, you should.

If you don’t have a plan to extract the water, you should.

If you don’t have a photo booth, you should.

If you’ve not hired me, you should.

That’s all I’m gonna say. Tommy Gibbs

If you’re a sports fan, you’ve probably heard a reporter say that the player “owned it” when they acknowledged that they made a mistake, blunder and/or just screwed something up that cost their team a win.

The Tampa Bay Rays lost a game to the Red Sox this past weekend at the very end with a boneheaded play by Tommy Pham, one of my favorite players. He’s a favorite of mine because of the intensity upon which he attacks the game.

The Rays are down one run in the bottom of the ninth, two runners on, two outs, a base hit ties the game, a double or more wins it. Pham gets picked off at first base by a throw from the catcher. Yes, from the catcher. Good Golly Miss Molly. What the heck!

In an interview after the game, Pham said he “just messed up.” The media was kind to him saying he “owned it.”

Really? What else could he do? He totally screwed it up. Nothing more, nothing less. Of course, his intention moving forward is to not make the same mistake again.

The problem in some dealerships is that nobody, and I mean nobody, owns the used car inventory.

Not the Dealer.
Not the GM.
Not the GSM
Not the Used Car Manager.

How do I know that to be true? Because if anyone owned it, they wouldn’t have aged units that they keep making excuses for.

I’m amazed at all the excuses I hear for having units over 60 days. As an old friend of mine used to say, “You can justify anything you want to justify.”

Hey Einstein, there’s no logic and no money to be made past 60 days. Betting you will make money on a 60-day old unit is a really bad bet. So why do you keep doing it? Beats the heck out of me.

Clearly, understand I’m not in favor of you dumping a 60-day old unit in the wholesale market. But, I’m highly in favor of you
finding a retail buyer before you get to the 60-day mark.

There’s a number that somebody will pay for it at retail. The problem is you keep holding out thinking you can make X. More often than not, the unit that just hit 60 days was a problematic unit from jump street, but you didn’t bother to identify it and take action to make it go away.

It goes without saying, but I’ll say it anyway, “It starts at the top.” If you’re the Dealer or GM, shame on you, shame, shame on you. That’s all I’m gonna say, Tommy Gibbs

Did you see it?

Did you see Tiger win the Masters?
Did you see the last shot?
Did you see Tiger’s fist pump?

Tiger on the green. Tiger walking off. The Crowd. I cannot imagine what it must have been like to have been Tiger or even be in that crowd.

Did you see the high fives?
Did you see the fist bumps?
Did you see the handshakes?
Did you see the hugs?
Did you see the tears?
Did you see the smiles?

If you didn’t, go google and watch. You don’t have to like golf to love this moment. You don’t have to know a putter from a driver to appreciate what Tiger has done.

Wrap your head around this; he’s gone through a nasty public divorce, an embarrassing mug shot from his DUI arrest when he took a bad mix of painkillers, and four back surgeries, with the most recent to fuse his lower spine. And now 14 years later he wins the Masters for the fourth time!

Tiger exemplifies those of us that have had to grind it out in this tough car business. Tiger gives us all hope that with hard work and perseverance we can push through to victory regardless of the odds and circumstances.

The story isn’t perfect. They never are. We never are. But it’s a heck of a good one. Watch closely kids. Being great is one thing. Being great after falling out of grace takes twice as much work and ten times as much courage. That’s the good stuff in life. That’s why a bunch of old dudes got tears in their eyes. That’s why you can, even when you think you can’t.

High Fives
Fist Bumps
Handshakes
Hugs
Tears
Smiles

That’s what Champions do. Be a Tiger. That’s all I’m gonna say. Tommy Gibbs

What does a bear do in the woods? Eats corn.

My business partner for most of my adult life has been Ashton Lewis, Sr. an amazing human and Automobile Dealer in the Hampton Roads area of VA.

Ashton grew up in both the automobile and farming business. One of Ashton’s farms was located adjacent to the Great Dismal Swamp in Chesapeake, VA where corn was a primary crop.

As Ashton tells the story, he would observe a bear come out of the woods, pick an armful of corn to take back into the woods to eat or share with his friends and family.

The bear would sometimes drop an ear of corn and rather than continue into the woods, the bear would put down the armful of corn and then re-gather them all up just to save one ear of corn.

That’s what it’s like when you keep hanging onto that aged unit that you’re never going to make any money on. You spend too much time trying to make money on an aged unit and not enough time figuring out how to make money on the fresher pieces.

Your window of opportunity to make money on a used car is about 40 days or less and that’s a stretch.

Had you been smart enough to identify units that have little or no profit potential on day 1 then you wouldn’t be looking at a stone-cold loser on day 61.

The Bear-Drops ear of corn. Throws down all the others. Wastes time and energy re-gathering the ears of corn.

You-Do not identify problematic units on day 1. You waste time and money struggling with aged units on day 61. Grosses go south because you’re selling too many units late in the life-cycle. You never reach your full potential because you’re thinking like a bear.

Had the bear paid closer attention to how many ears of corn he/she could actually carry then the bear would not have wasted time and energy dealing with one stupid ear of corn.

Had you paid closer attention to what you were dealing with on day 1 you wouldn’t been beating your head against the wall trying to figure out what to do with an aged unit on day 61.

My life-cycle management process makes you a much smarter bear. That’s all I’m gonna say, Tommy Gibbs

A lot of dealers had a record-breaking month in March. Some of them have already spent too much time gawking at their financial statements, poking their chest out and patting themselves on the back.

And guess what? For some of them, April is off to a slow start.

Let me caution you; you cannot be satisfied. You can never be satisfied. Those sounds you hear behind you are the competition coming to gobble you up.

If you take just one little break, one little hiccup, it could be the very thing that puts you into a downward spiral.

People are successful for a variety of reasons, one of them being “fear.”

The fear of failure.
The fear of falling back.
The fear of giving up all they have worked so hard for.

It’s that fear that causes the successful ones to keep pushing and to keep looking for new and better ways of doing things.

Scott McNealy, CEO of Sun Microsystems, once said, “You either eat someone for lunch, or you can be lunch.” No truer statement has ever been made.

Being a hard-charging competitor can be craziness at its best. Competing is fun. Trying to get better is the lifeblood of competing, leading and winning.

Study it. Embrace it. Love it. Use it as success fuel. Use it to take you to the top of your mental game.

Develop an unstoppable competitive mindset, and it will push
you so far ahead of the competition that you won’t have to worry about looking over your shoulder.

What you have to realize is that most people are just lazy and because they are lazy they can become complacent very easily. Ultimately their lazy streak will show its head; that’s when you can “own” them.

There are times when you can have a good month in spite of yourself because the market lets you win.

No easy wins this month. Time to go to work. That’s all I’m gonna say, Tommy Gibbs