A dealer that I respect very much told me something profound. He said that he actually welcomes both wholesale and retail loss on used vehicles providing that the loss is on fresh units. He will not tolerate, however, wholesale or retail loss on aged units.
In other words, he acknowledges that you can not be in the used car business without making mistakes, but insists that those mistakes be recognized and addressed early rather than later. He has no patience for those who can not recognize or refuse to deal with their problems upfront. I think that this is really profound advice.
Remember that in the old “inefficient used car business”, time was your friend. It was usually just a matter of time before somebody could be found that would take the vehicle home for a little too much money. Today, because of the internet, the used car market is very efficient and there’s not so many of those people around any more. As a result, time is no longer your friend on the used car lot and problems must, therefore, be recognized and dealt with quickly.
Now, if you agree, and really agree, ask yourself how many units you have over 60 days of age.
Related Articles
2 users responded in this post
In the mid sixties a dealer in my employer’s office left a long lasting impression by saying that he had just fired a used car manager for making money on wholesale. Because he said “He was missing my new car business”. Twenty years later as a used car manager for a Key Royal dealership, my goal was to lose $1 per trade-in for my wholesale units, so that I would be sure to maximize gross and new car sales. I never reached that exact goal, but am reminded of that philosophy by this article Very good information.
Very interesting blog, i have added it to my fovourites, greetings
Leave A Reply
Please Note: Comment moderation maybe active so there is no need to resubmit your comments