There’s a lot of talk these days about the “Velocity Method” of selling used cars and trucks.
There are some that would define Velocity as: “A method of giving your cars away so as to impact your gross to a point of a substandard amount that will make you want to throw up your hands, beat yourself over the head, and barf.”
My definition for the word Velocity: the whipping boy of the auto industry that can be blamed when we use software pricing tools as the Bible, don’t use our brains and don’t use the tool as it was intended in the first place. Software is a tool. It’s not a genie in a bottle.
If you’re in a favorable market day’s supply position, why would you not shoot the moon on certain units for 10 to 20 days? If you use your vAuto pricing tool and apply some common sense your odds of improving gross profit and volume increase.
That being said, dealers today have never been smarter when it comes to understanding inventory turn. By and large, most dealers really do “get it.”
You don’t have to give all your units away, but you have to be smart enough to know how to turn your inventory. Being smart means knowing when to pull the trigger.
Dealers often miss the chance to take a shot at making some big grosses because their vehicles are hung up in recon for the first 10 to 20 days of their shelf-life. Those first 20 days are always when you make the most money.
As you move forward, think about the choices you have:
1. Hold a high gross profit per unit.
2. Improve your volume with lower grosses.
3. Improve your volume and be smarter about pricing and gross profit.
In today’s market, your best chance is #3. That’s all I’m gonna say, Tommy Gibbs