Thank you so much for your note. First, in order to implement a drop dead aging strategy at any point, whether it be 45, 60 or 90 days, the process begins literally on day one. More specifically, at the very point of acquisition, it’s imperative to know the vehicle’s physical qualities and the market day’s supply. For example, if it’s a replaceable vehicle, with high supply and low demand, the vehicle should go out into the market priced very competitively and you should be prepared to drop it frequently. Conversely, if the vehicle has special physical appeal, high demand and short supply, it deserves to be put in the market with a healthy gross and drop slowly if necessary.

As your vehicle ages, the frequency and amount of price changes should increase. Also, the comparative set should be expanded to include more geography. Jasen Rice, your performance manager, is very skilled on this technique, and I will ask him to contact you for one-on-one coaching and consultation.

Velocity dealers will re-price a vehicle every day if necessary in order to make it go away in the specified period of time. If the vehicle hasn’t gone away, it only means that we haven’t been willing to do what it takes quickly enough. If you find yourself with the vehicle at the age limit, pull the trigger and wholesale it. The pain that you will incur in the long run will be healthy, because it will force you to come to terms with the fact that it was either the wrong car from the beginning or there was a failure to do the right thing quickly enough. As you move forward with this solution, fewer and fewer vehicles will have to be wholesaled.

One more thing, I would not advise doing a wholesale dump of vehicles currently over the age limit. Simply draw a line in the sand and attack the beast from both ends. Don’t ever let another vehicle cross the line and apply creative persistence to make the vehicles over the limit go away as quickly as possible through the retail channel. Let me know if this approach makes sense to you, and again, please watch for a call from Jasen. – Dale

Thank you so much for your note. First, in order to implement a drop dead aging strategy at any point, whether it be 45, 60 or 90 days, the process begins literally on day one. More specifically, at the very point of acquisition, it’s imperative to know the vehicle’s physical qualities and the market day’s supply. For example, if it’s a replaceable vehicle, with high supply and low demand, the vehicle should go out into the market priced very competitively and you should be prepared to drop it frequently. Conversely, if the vehicle has special physical appeal, high demand and short supply, it deserves to be put in the market with a healthy gross and drop slowly if necessary.

As your vehicle ages, the frequency and amount of price changes should increase. Also, the comparative set should be expanded to include more geography. Jasen Rice, your performance manager, is very skilled on this technique, and I will ask him to contact you for one-on-one coaching and consultation.

Velocity dealers will re-price a vehicle every day if necessary in order to make it go away in the specified period of time. If the vehicle hasn’t gone away, it only means that we haven’t been willing to do what it takes quickly enough. If you find yourself with the vehicle at the age limit, pull the trigger and wholesale it. The pain that you will incur in the long run will be healthy, because it will force you to come to terms with the fact that it was either the wrong car from the beginning or there was a failure to do the right thing quickly enough. As you move forward with this solution, fewer and fewer vehicles will have to be wholesaled.

One more thing, I would not advise doing a wholesale dump of vehicles currently over the age limit. Simply draw a line in the sand and attack the beast from both ends. Don’t ever let another vehicle cross the line and apply creative persistence to make the vehicles over the limit go away as quickly as possible through the retail channel. Let me know if this approach makes sense to you, and again, please watch for a call from Jasen. – Dale

Can you talk a little more about how you recommend a dealership run their “drop-dead” aging policy? I am attempting to transform our entire operation in to a “velocity” dealership but we have been reluctant to institute a firm aging policy. Say we institute a firm 60 day policy, if we are not to wholesale any viable vehicles (which I agree with) what happens at day 60 to make it drop-dead? I am running a 96-94-92-90 policy on my market rankings, but am still having trouble with vehicles turning 90 days old. Any advice to help eliminate this would be very helpful.

Thanks,

Nick Miller

Can you talk a little more about how you recommend a dealership run their “drop-dead” aging policy? I am attempting to transform our entire operation in to a “velocity” dealership but we have been reluctant to institute a firm aging policy. Say we institute a firm 60 day policy, if we are not to wholesale any viable vehicles (which I agree with) what happens at day 60 to make it drop-dead? I am running a 96-94-92-90 policy on my market rankings, but am still having trouble with vehicles turning 90 days old. Any advice to help eliminate this would be very helpful.

Thanks,

Nick Miller

If it doesn’t sparkle, it’ll sit waiting for a grinder to chew you up.

If it doesn’t sparkle, it’ll sit waiting for a grinder to chew you up.

Thanks for sharing this email. After 15 years in this industry I am still amazed by dealerships that wholesale inventory that is retailable. I was speaking to a group of around 40 dealers yesterday and I reminded them of the same thing you said above. ” Every vehicle should be sold in the retail market, even if is it at a wholesale price (unless it’s unsafe)”.
Common sense says you’re better to lose money to a retail customer who may refer customers you CAN make money on. They also may actually return for service. The guy next to you at the chute isn’t going to come service the car with you or refer friend.

Another thing that’s important to look at is why we are all willing to pay retail for cars at the sale yet we still try to rip the trade from a retail customer which many times results in losing a deal. (Another day for that topic though).

I appreciate you posting things like this because we need to do a major paradigm shift in how we deal with inventory turn and loss related to it.

Keep up the great work!

Sincerely,
Mat Koenig

Thanks for sharing this email. After 15 years in this industry I am still amazed by dealerships that wholesale inventory that is retailable. I was speaking to a group of around 40 dealers yesterday and I reminded them of the same thing you said above. ” Every vehicle should be sold in the retail market, even if is it at a wholesale price (unless it’s unsafe)”.
Common sense says you’re better to lose money to a retail customer who may refer customers you CAN make money on. They also may actually return for service. The guy next to you at the chute isn’t going to come service the car with you or refer friend.

Another thing that’s important to look at is why we are all willing to pay retail for cars at the sale yet we still try to rip the trade from a retail customer which many times results in losing a deal. (Another day for that topic though).

I appreciate you posting things like this because we need to do a major paradigm shift in how we deal with inventory turn and loss related to it.

Keep up the great work!

Sincerely,
Mat Koenig