Comments on: David Desmarais Takes Me to Task for Mis-Timed Predictions http://www.dalepollak.com/2009/07/08/david-desmarais-takes-me-to-task-for-mis-timed-predictions/ Used Car Market - A Guide for Success Wed, 10 Mar 2010 22:19:12 -0600 http://wordpress.org/?v=2.8.6 hourly 1 By: Mike Hills http://www.dalepollak.com/2009/07/08/david-desmarais-takes-me-to-task-for-mis-timed-predictions/comment-page-1/#comment-9814 Mike Hills Sat, 18 Jul 2009 17:27:17 +0000 http://www.dalepollak.com/?p=371#comment-9814 I wouldn't trade our current inventory turn of almost 11 times per year and a nearly negligible aged inventory (less than 8% of total investment over 75 days) for a return to the old days. Regardless of whether wholesale prices are high or low, buying AND selling in today's market at today's prices is the only strategy that any intelligent "investor" would employ. Even our 12 units of overaged inventory (over 75 days in inventory) are saleable at 93% price to market. In case Dave Desmarais questions our credibility, we are the #1 retailer of Toyota Certified Used Vehicles in New England, outselling Toyota dealers in much larger metro markets with an advertising cost per vehicle retailed about 50% less than our peers. I wouldn’t trade our current inventory turn of almost 11 times per year and a nearly negligible aged inventory (less than 8% of total investment over 75 days) for a return to the old days. Regardless of whether wholesale prices are high or low, buying AND selling in today’s market at today’s prices is the only strategy that any intelligent “investor” would employ.
Even our 12 units of overaged inventory (over 75 days in inventory) are saleable at 93% price to market.
In case Dave Desmarais questions our credibility, we are the #1 retailer of Toyota Certified Used Vehicles in New England, outselling Toyota dealers in much larger metro markets with an advertising cost per vehicle retailed about 50% less than our peers.

]]> By: James Hutmacher http://www.dalepollak.com/2009/07/08/david-desmarais-takes-me-to-task-for-mis-timed-predictions/comment-page-1/#comment-9743 James Hutmacher Thu, 16 Jul 2009 14:25:00 +0000 http://www.dalepollak.com/?p=371#comment-9743 The reality is that there is truth in both notes. Used cars have not just become a commodity; they have been one all along, just less predictable recently than in the past. While the gasoline crunch hit us all by surprise there has always been trends in the market based on the time of year that dictated what you stocked and how much of it. Many dealers do well by purchasing certain units in the down market in anticipation of the upswing or more predictable trends in the market such as Tax Season. Yes it is more difficult to predict what used to be typical swings in the market place but what a successful dealer does or the one who wants to be should do is have a strategy or game plan for selling each unit he or she purchases or trades for. This includes a pricing and marketing strategy both to the customers and to the staff of the dealership. You have to know your market and who you advertise and market to. As an example if you are a heavy subprime store then you have to know before you purchase a vehicle where it fits within the big picture. What kind of down payment will be required to get this unit done for your average customer? What term can you get? What backend potential is there? Is your recon going to put you in a situation where your profit is limited? Personally I had what I considered several inventories. My subprime, Internet, Core, Non Core, really you can call them what you want, the reality is that every vehicle I traded for or purchased was to fit within one of those inventories and within that inventory there was a strategy for retailing them and maximizing profit. I call it buying with a purpose. Stephen Covey talks about having your "end in mind" and rather than waiting for a car to age I had my end in mind from the beginning. With all of that said if you are not marketing your inventory properly it really doesn’t matter how well you stock, you will never reach your full potential until you have mastered the ability to market them properly both online and offline, this includes pricing strategy and Search Engine Optimization which is a whole other subject. In closing, the dealers with purpose and strategy tend to be more nimble and less affected by market changes. They adapt with the market, create new strategies and execute them. There are always going to be vehicles sold in your market it’s just how many will you sell that is the question. A good question to ask your UCM is what his or her game plan is for a specific vehicle and wait for a response, you might be surprised by the answer. I believe that most worry about that "purpose" only when the car reaches a pre determined number of days in stock, and in reality it should start when you appraised the vehicle or decided to bid on it. The reality is that there is truth in both notes. Used cars have not just become a commodity; they have been one all along, just less predictable recently than in the past. While the gasoline crunch hit us all by surprise there has always been trends in the market based on the time of year that dictated what you stocked and how much of it. Many dealers do well by purchasing certain units in the down market in anticipation of the upswing or more predictable trends in the market such as Tax Season. Yes it is more difficult to predict what used to be typical swings in the market place but what a successful dealer does or the one who wants to be should do is have a strategy or game plan for selling each unit he or she purchases or trades for. This includes a pricing and marketing strategy both to the customers and to the staff of the dealership. You have to know your market and who you advertise and market to. As an example if you are a heavy subprime store then you have to know before you purchase a vehicle where it fits within the big picture. What kind of down payment will be required to get this unit done for your average customer? What term can you get? What backend potential is there? Is your recon going to put you in a situation where your profit is limited? Personally I had what I considered several inventories. My subprime, Internet, Core, Non Core, really you can call them what you want, the reality is that every vehicle I traded for or purchased was to fit within one of those inventories and within that inventory there was a strategy for retailing them and maximizing profit. I call it buying with a purpose. Stephen Covey talks about having your “end in mind” and rather than waiting for a car to age I had my end in mind from the beginning. With all of that said if you are not marketing your inventory properly it really doesn’t matter how well you stock, you will never reach your full potential until you have mastered the ability to market them properly both online and offline, this includes pricing strategy and Search Engine Optimization which is a whole other subject. In closing, the dealers with purpose and strategy tend to be more nimble and less affected by market changes. They adapt with the market, create new strategies and execute them. There are always going to be vehicles sold in your market it’s just how many will you sell that is the question. A good question to ask your UCM is what his or her game plan is for a specific vehicle and wait for a response, you might be surprised by the answer. I believe that most worry about that “purpose” only when the car reaches a pre determined number of days in stock, and in reality it should start when you appraised the vehicle or decided to bid on it.

]]> By: CarGuyNY http://www.dalepollak.com/2009/07/08/david-desmarais-takes-me-to-task-for-mis-timed-predictions/comment-page-1/#comment-9674 CarGuyNY Tue, 14 Jul 2009 02:19:20 +0000 http://www.dalepollak.com/?p=371#comment-9674 Dale, Too each his own, 214% ROI YTD, oldest car in stock is 31 days...grosses are up, and 43% of my inventory I would consider "Core". Go Yankees!! Dale,
Too each his own, 214% ROI YTD, oldest car in stock is 31 days…grosses are up, and 43% of my inventory I would consider “Core”.

Go Yankees!!

]]> By: JoePistell http://www.dalepollak.com/2009/07/08/david-desmarais-takes-me-to-task-for-mis-timed-predictions/comment-page-1/#comment-9600 JoePistell Sat, 11 Jul 2009 15:54:14 +0000 http://www.dalepollak.com/?p=371#comment-9600 Counter punchers, 2nd guessers, arm-chair QBs. This personality drives me nuts. I lost track of how many times I have observed managers uncomfortably fumbling for ideas on how to take their team forward. Wait, I take that back, actually, they have ideas, it's the ridicule of a failed idea they don't want. In my travels, most managers are comfortable counter-punching the ideas of others. I think it comes from years of "bitch circles" as a sales rep, 2nd guessing their bosses efforts. There are no money making ideas to be found staring into the rear view mirror. All you'll accomplish is making sure to CYA (Cover Your A**). Maybe this adds to why sales training & marketing gurus are so popular. Counter punchers, 2nd guessers, arm-chair QBs. This personality drives me nuts.

I lost track of how many times I have observed managers uncomfortably fumbling for ideas on how to take their team forward. Wait, I take that back, actually, they have ideas, it’s the ridicule of a failed idea they don’t want.

In my travels, most managers are comfortable counter-punching the ideas of others. I think it comes from years of “bitch circles” as a sales rep, 2nd guessing their bosses efforts.

There are no money making ideas to be found staring into the rear view mirror. All you’ll accomplish is making sure to CYA (Cover Your A**). Maybe this adds to why sales training & marketing gurus are so popular.

]]> By: Craig Belowski http://www.dalepollak.com/2009/07/08/david-desmarais-takes-me-to-task-for-mis-timed-predictions/comment-page-1/#comment-9597 Craig Belowski Sat, 11 Jul 2009 13:03:42 +0000 http://www.dalepollak.com/?p=371#comment-9597 I wrote this comment on Wardsauto.com in March....still say buy and sell in todays market is the smart play. I can say that after looking back on this winter and Dale’s prediction of used vehicle values I am happy to have listened to and followed alot of what Dale has to say. Although many vehicles have made a comeback in value, holding on to inventory hoping it is going to rise in value only works in specialty markets and takes research and capital along with guts. Technology is making selling cars new or used a different game. The dealers that embrace the technology available will be the best off in the years ahead. Long gone are the days of having the right customer fall into your lap and pay too much for a vehicle because they don’t know where to find a replica. Today’s nearest competition is now 1 click away and if they have the same car for $2000 less because you left room for negotiation will they even call? I wrote this comment on Wardsauto.com in March….still say buy and sell in todays market is the smart play.

I can say that after looking back on this winter and Dale’s prediction of used vehicle values I am happy to have listened to and followed alot of what Dale has to say. Although many vehicles have made a comeback in value, holding on to inventory hoping it is going to rise in value only works in specialty markets and takes research and capital along with guts. Technology is making selling cars new or used a different game. The dealers that embrace the technology available will be the best off in the years ahead. Long gone are the days of having the right customer fall into your lap and pay too much for a vehicle because they don’t know where to find a replica. Today’s nearest competition is now 1 click away and if they have the same car for $2000 less because you left room for negotiation will they even call?

]]> By: Emiltsch http://www.dalepollak.com/2009/07/08/david-desmarais-takes-me-to-task-for-mis-timed-predictions/comment-page-1/#comment-9575 Emiltsch Sat, 11 Jul 2009 00:06:22 +0000 http://www.dalepollak.com/?p=371#comment-9575 Dale, You summed it up perfectly: "You definitely exemplify the best traits of a Monday morning quarterback." 'Nuff said. Eric Dale,

You summed it up perfectly: “You definitely exemplify the best traits of a Monday morning quarterback.”

‘Nuff said.

Eric

]]> By: john67337 http://www.dalepollak.com/2009/07/08/david-desmarais-takes-me-to-task-for-mis-timed-predictions/comment-page-1/#comment-9568 john67337 Fri, 10 Jul 2009 19:02:00 +0000 http://www.dalepollak.com/?p=371#comment-9568 I was explaining the formula. congratulations on your ROI. Bubba I was explaining the formula. congratulations on your ROI.

Bubba

]]> By: Robin Trehan http://www.dalepollak.com/2009/07/08/david-desmarais-takes-me-to-task-for-mis-timed-predictions/comment-page-1/#comment-9567 Robin Trehan Fri, 10 Jul 2009 18:18:16 +0000 http://www.dalepollak.com/?p=371#comment-9567 Dale why don't you you control the part of the supply chain by having a interest in financial institutions ( Small banks). Just an idea. RObin Trehan Dale
why don’t you you control the part of the supply chain by having a interest in financial institutions ( Small banks).

Just an idea.
RObin Trehan

]]> By: kkocourek http://www.dalepollak.com/2009/07/08/david-desmarais-takes-me-to-task-for-mis-timed-predictions/comment-page-1/#comment-9542 kkocourek Fri, 10 Jul 2009 02:19:18 +0000 http://www.dalepollak.com/?p=371#comment-9542 Overstock when prices were cheap? You have got to be kidding...That's the kind of reckless outdated Bubba Gump inventory management that got most people into trouble in the past. I would be willing to bet the author isn't a dealer with his heart, skin, blood and cash in the market. If he did I bet he would feel differently. As of today I have $2,700,000 of used car inventory. It is turning 16 times per year and we have no units over 60 days old. It is impossible to turn your inventory and protect your gross profit when the inventory is aged and not turning because you overstocked when prices were cheap. The theory is outdated and no longer works. Overstock when prices were cheap? You have got to be kidding…That’s the kind of reckless outdated Bubba Gump inventory management that got most people into trouble in the past. I would be willing to bet the author isn’t a dealer with his heart, skin, blood and cash in the market. If he did I bet he would feel differently. As of today I have $2,700,000 of used car inventory. It is turning 16 times per year and we have no units over 60 days old. It is impossible to turn your inventory and protect your gross profit when the inventory is aged and not turning because you overstocked when prices were cheap. The theory is outdated and no longer works.

]]> By: john67337 http://www.dalepollak.com/2009/07/08/david-desmarais-takes-me-to-task-for-mis-timed-predictions/comment-page-1/#comment-9539 john67337 Thu, 09 Jul 2009 21:58:22 +0000 http://www.dalepollak.com/?p=371#comment-9539 speculate vs retail is a function of the time value of money in the speculated asset vs the EV of asset after the market gain. Example if you chart convertible ACV's in the r months vs the non r months over time you get a sine curve that works with a high degree oonfidence. outside forces other than seasonal predictability "snow vs spring" like oil embargo's etc will increase the beta of risk, and volutility. learned that buying 98's and Electra's that people traded in on vega's & b210's back in the 70's. Hope this clears things up. speculate vs retail is a function of the time value of money in the speculated asset vs the EV of asset after the market gain. Example if you chart convertible ACV’s in the r months vs the non r months over time you get a sine curve that works with a high degree oonfidence. outside forces other than seasonal predictability “snow vs spring” like oil embargo’s etc will increase the beta of risk, and volutility. learned that buying 98’s and Electra’s that people traded in on vega’s & b210’s back in the 70’s. Hope this clears things up.

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