Profound Advice

June 27, 2008

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.