When I was 14 years old, I took my girlfriend to the Va. State Fair. I wanted to win her a Teddy Bear. You know one of those really big ones. I had $25.00 to my name and played one of those games of chance where you have to get three balls out of five through a hole. Every time I would lose, the carnie would say, “Here try it one more time and if you win I’ll give you all your money back.” It didn’t take long until he had my $25.00 and I still didn’t have a Teddy Bear. To say I was devastated is an understatement.

Are you the kid still trying to win a Teddy Bear? Are you running your used car department the same old way expecting different results?  Is a little voice in your head saying “Come on, try one more time, you will win all your money back”?  Reach up and smack yourself in the head and come to grips with reality will you please? It’s not going to get any better until you become a better merchandiser and marketer. Make sure you read this entire article. You will be glad you did.

1. Revaluate-Take a deep breath. Now go look in the mirror. Better yet, go walk your lot. Take the blinders off. First thing you have to ask yourself is “Does it look like Nordstrom?” Ok, maybe it’s not going to look like Nordstrom, but does it look like WalMart after a big sale? You know, everything is just thrown everywhere. Let’s do a little checklist:

1. Are the vehicles in straight lines?
2. When was the last time the entire lot was rotated?
3. Are you using angles to display your inventory?
4. If you are using license plates do they all have one or do some have them on the front, some on the rear and some not at all? Some cars do not have a bracket on the front. Why would you even bother if you can’t put a license plate on all units?
5. Do they all have your decal on the rear of the vehicles?
6. Are all old decals removed?
7. Do you have fresh FTC stickers on each vehicle?
8. Do you have fresh window stickers on each vehicle?
9. Do you have the year of each vehicle on the front and rear windshield? Yes, front and rear.
10. If you have other decals or markings on the windshields, do they all have same or similar markings?
11. Do you have hang tags? If so, do they all have hang tags? Are some lying on the floor?
12. Do they all have at least a quarter of a tank of gas in them?
13. Are they nasty, dirty on the outside?
14. Are you making use of your entire front row for used vehicles?
15. When the public rides by or pulls onto your lot can they easily identify where the used cars are?

2. Refocus-To be successful in the used car business you have to be well focused on it and be totally committed. Your entire management team has to understand your commitment to the used car business. This doesn’t happen through osmosis and a meeting every six months. When I say entire management team I mean just that. All Sales, F&I Management, Service Management, Parts Management, Body Shop Management and the Controller. Little Johnny, the lot attendant, needs to be a part of this as well. For the next 60 days, meet with these key staff members twice a week to discuss where you are and where you’re going. Tuesdays and Fridays are best. Make sure on Fridays that they are all included in a lot walk. Do not miss a used car on this lot walk. Every car in your inventory must be touched. If it’s in service, touch it. If it’s in prep, touch it. If it’s in the budget center, touch it. Everybody touches it. You will come across issues you never knew were there and better yet you will solve them immediately. (Don’t let anyone miss these walks.) Make sure a part of  that conversation includes everyone knowing how much money you have tied up in used cars and how many of those dollars are over 60 days. Yes, they need to know the dollars, not just the number of units. Make sure they also know what percentage is dead money over 60 days. Example: You have $1,000,000 in used. $600,000 is over 60 days. Make sure they understand that 60% of your money is dead and eroding fast.

3. Re-Recon-Take every unit over 30 days old back through a recon process. (You’ve already missed your best window of opportunity to make gross; that would be the first 20 days.) Most of them should not need mechanical work done, but if they do, get it handled. Most importantly, put a full clean up back on them. I can’t imagine you having to spend more than $75 or so a car, but whatever the amount, it’s going to be worth it.

4. Re-Invest-in yourself and your management team. Do something to gain some knowledge. Hire me, visit CarMax, or visit a dealer friend in another state that does a good job in used. Attend a workshop. Join a Twenty Group. Join a Used Car Twenty Group. Do something besides sitting there and waiting for something to happen. You may think you already know all there is to know about the used car business and you will just be wasting your money. The fact is maybe you actually know a lot, but you need something to jar your brain and get it going again. You have become real good at talking the talk, but you may not be walking the walk.

5. Re-think- your management team. Do you really have the right person running your used car operation?  Yes, that person may have been with you for years. Loyalty sometimes equals mediocrity. Maybe they have some great skills, but the fact may be that you are not making the best use of their talents. Used car managers today have to be “Asset Managers.”  It is not a matter of just being a “Car Guy.”  They have to have a good blend of common sense and ability to make use of technology. In my travels, about 75% of the dealers have the wrong person managing their used car operation and they wonder why they are not maximizing their full potential? (Even if you have the right person, they have to have the right tools, processes and your full support to be successful.)

A special note to those of you in management that feel somewhat frustrated by the lack of support from your Dealer or General Manager. You may have some things you want to do, but the Dealer or General Manager keeps rejecting your ideas. Next time you have a brilliant idea, don’t just discuss it with your dealer or General Manager, put your idea in the form of a proposal totally written out with every detail. Present it to the dealer or General Manager and ask for 90 days to make your plan work. When you give it to them tell them not to make a decision right away. Ask them to review it and make a decision within the next 48 hours. Most of the time, a dealer with half a brain will let you go with it, unless it’s just totally out there in left field. If your requested is reasonable and the Dealer or GM rejects it, you might want to start looking for someplace else to hang out because you are fighting a losing battle. That’s all I’m gonna say.

Tommy Gibbs