Belief is a fleeting thing at times. Whenever I speak to a 20 group I always ask them by a show of hands how many of them have a plan in place whereby they do not allow their used car manager to have a unit over a given number of days like 60, 75, or 90 days. After asking that question I ask them how many of them have a unit over that assigned number of days. Almost without exception they all keep their hands in the air. Look, you are either pregnant or you are not. Many people say they believe in something, but most don’t really live it. They talk the talk, but don’t walk the walk.
Why would you state a policy and not enforce it? Do you not have any backbone or spine? I have to assume you end up letting your used car manager give you a lot of excuses for keeping those units around. There is no excuse for letting a depreciating asset sit on the shelf.
I want to give you some advice on how to fix the problem and get on a path to glory. Do not take those old age units to the auction and dump them. If you can make some adjustments to their cost then do so.
In most cases adjusting units is better than putting bonus money on them. Sales people tend to walk around them when you are high in them. You can believe what you want, but when you put bonus money on those aged units the managers have nothing to gain and they walk around them as well.
The most important thing to do is to start to massage the time line. If you are a 90 day guy/gal and you have units over 90 days, the focus cannot be on just those units over 90 days. The focus would have to be on those at 75 days. The same holds true if you are a 60 day wonder person. Your focus would need to be on those at the 45 day mark and beyond. What you have to remember is there are a bunch of vehicles coming like a locomotive down a railroad track wanting to bump up against your number whatever the number happens to be.
If you’ve heard me speak or read previous articles I’ve written you know the real number should be 45 days and gone. That does not mean dumping units at 45 days and losing a lot of money. What it means is aggressively pricing your units from day one and reducing the pricing until they are sold at some retail number.
The biggest problem I continue to observe is that used car managers do not recognize they have a problem unit on their hands until 60 days and beyond. If you go back and review your oldest units they all have a story line tied to them. 99% of the time it was a problem from day one and nobody recognized it for what it was.
I believe you can do better, but it doesn’t matter what I believe. What matters is what you believe and that’s all I’m gonna say, Tommy Gibbs