5 Simple Steps to Maximize Used Vehicle Profits
- Learn best practices for managing aged inventory.
- "The longer you keep a vehicle in inventory, the more it will cost you."
Every day a unit sits on your lot is a day it’s costing you money.
You need to make sure your inventory is available to consumers and priced at least in the top three of your market to be considered so you don’t end up with aged inventory on your lot.
Here are 5 best practices to help you decrease the chance of having aged inventory and how to deal with aged inventory when the problem does arise:
1) Use the Market
Price your vehicles to the market – not above it or too far below it. Your customers are looking at every dealership’s inventory around you for the best deal. You don’t want to sell yourself short just to make the sale, and you definitely don’t want to be asking the highest price.
2) Quick In, Quick Out
Get your vehicles on the Internet as soon as you take them in. Recondition these vehicles within 48 hours of acquisition to make them front line ready. The goal is to make these vehicles look and drive as good as new.
3) Spotlight Your Shining Stars
As early in the process as possible, identify certified pre-owned vehicles from the rest of your used vehicle inventory. Then prepare them and get them to market as quickly as possible.
4) Daily Inspection
Walk the lot daily to see what your customers see. This way, you’ll pick up on vehicles that need additional care instead of your customers letting you know.
5) Have a Price Plan
Adjust prices after two weeks and beyond until you hit your hard turn date. The longer you keep a vehicle in inventory, the more it will cost you. The values of pre-owned vehicles can drop daily, especially as you move from one month to another.
From acquiring the right inventory, to appraising it properly, and ultimately trying to eliminate or decrease aged units on your lot, it takes a lot of work to maximize your used vehicle profits.
If you have the manpower and the money, all of this can be done manually. More than likely though, it will be ineffective and your competition will beat you every time.
Solutions like Used Vehicle Management do all this and more to help your used vehicle department increase profitability and efficiency.