There are plenty of dealers that blame V-Auto for costing them vehicle gross. But while attending the Lot Pop Dealer Workshop recently, I have some interesting information to share on this subject.
“All that V-Auto did was aggregate the data on the internet – it didn’t cost the dealers money. Most dealers think V-Auto is the reason gross profit per unit has gone down, but it is really not. The internet itself has cost the dealers the money because everyone can now see what the cars are priced at. All V-Auto did was compile all the data.” – Jasen Rice
Improving Gross and Volume
Here are 5 areas to improve gross and volume as it relates to your used car inventory.
- Inventory Status – Monitoring your inventory sold rate by age buckets. Sixty-five percent of cars are sold in the first 30 days and less than 10 percent of the cars have ages where you want to exist. The 3 age buckets are: 1st bucket: 0–30 days, 2nd bucket: 31–45 days, 3rd bucket: 46–60 days
- Inventory Marketing – Pricing and visibility of the inventory to have it able to move through all 3 buckets
- Stocking – Why you are stocking the vehicles you stock and leveraging the proper price points and mix of same franchise units in stock
- Inventory ROI – Which cars generate the most leads and greatest return on investment
- Turnaround Time – Slow turnaround time kills gross
Vehicle Age vs. Sold Units
Here are 7 metrics that affect sold units by age. Vehicle gross problems are created a lot of times because you are selling your cars late in the cycle. This will almost always kill your gross.
- If you don’t have enough inventory to sell
- Pricing on fresh inventory has gone up each week
- Took too long to get pricing and descriptions on your fresh inventory
- Percent of missing photos has increased
- Are you bringing in slow-moving cars
- Bringing in high-dollar vehicles
- Fresh cars are not being displayed online (usually a feed issue)
What I love about being able to share this type of information is that all the advertising in the world cannot sell a high-priced or bad product. A major theme that Strong Automotive Merchandising sees is that dealers who have better inventory management and pricing across used cars see better conversions from their digital marketing.