Comments on: The Core is Rotten

By: Uncle Phil

Uncle Phil — Sun, 04 May 2008 18:30:21 +0000

In my previous job, when I consulted on the statistical modeling of inventory plans for a large used car retailer, we referred to the notion of a “core inventory” as “driving with the rear-view mirror.” These old guys who go to auction and buy based on “gut instinct and experience” could survive when everyone else was doing the same thing. Now that we have access to real market data, the old ways will get you in deep trouble.

By: Joe Kirby

Joe Kirby — Sun, 04 May 2008 16:53:32 +0000

I do think when it comes to factory certified late model vehicle core makes sense. If I have a late model Ford Focus and can not certify it and the Ford dealer has a late model Cobalt which I could certify and he could not, we’d both be better off swapping. Same goes for Hondas and the others. Once the years and mileage get beyond the Certified vehicles I believe the argument against core makes more sense. In fact it would be nice to capture sales data from the dealer’s DMS and display a dealers past performance on a similar vehicle when he’s using live pricing if he has actually sold a vehicle similar to the one being currently priced

By: ruggles

ruggles — Sat, 03 May 2008 14:07:40 +0000

Amen brothers! Ever heard the phrase “Past performance is no indication of future results”? Inventory requires some forward thinking. The best way to get in real trouble with your pre-owned inventory is to rely moslt on past performance.

By: hmmm.

hmmm. — Fri, 02 May 2008 16:13:17 +0000

Changes in interest rates, fuel costs are all “complements” to vehicle sales. We all know how these can affect sales, but I will also say that “substitutes” can affect sales as well. Let’s say you’re stocking Chevy Tahoes, and then a huge influx of Ford Expeditions enters the market and increases the days supply which ultimately lowers the transaction price for Expeditions. Your sales of Tahoes will fall, because the lower price of Expeditions will cause some of your buyers to switch over. This is cross-price elasticity. Basic economics 101.