The Dealer Playbook
The Dealer Playbook

Episode · 1 month ago

The Achilles Heel of Used Cars w/ Jasen Rice

ABOUT THIS EPISODE

One of the most common problems with selling more used vehicles is Turn Around time, says LotPop founder, Jasen Rice.

One of the things dealers often forget about is holding costs. How much does it cost to hold a vehicle in the "slot?" Some dealers are paying between $30 - $100 vehicles per day.

Learn what you can do to overcome the expense of holding used vehicles for too long so that they turn over much quicker.

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...the car business is rapidly changingand modern car dealers are meeting the demand. I'm Michael Cirillo andtogether we're going to explore what it takes to create a thriving dealershipand life in the retail automotive industry join me each week forinspiring conversations with subject matter experts that are designed tohelp you grow. This is the dealer playbook. Yeah. Mm mm. Yeah. Like when you go into a store, when youdo your 20 groups or your training through your university or things ofthat nature, what are maybe some of the top most common broken processes aside?Because we've already talked about aging policy. What are some of theother ones that you would recommend dealers pay attention to that they needto avoid and or fix immediately? Um,...

...again, we focused on increasing theamount of cars to sell in the 1st 30 days. But in order to do that, what wefound was the Keeley Steele was turnaround time. Um, if time is ofessence and one of the things I had to struggle to get dealers understand it.So it's amazing that a lot of dealers don't really look at and considerholding cost. How much per day does it cost for a car to sit on in the slotAnd it's upwards of 35-75 or more per day. Um, some dealers are paying 100 aday for that car to sit in one slot per day and so let's just round it down the$50 meet in the middle there at $50 times four days of that car, notgetting through services, $200 expense. Now, one way I figured to overcome thatwith dealers is get them to understand Just forget about having 100 slots onyour lot because you've got 99 other ways to make money then this one cartaking too long. Let's just imagine you have one slot, you have one slot tosell a car to make enough money to make...

...your payroll, you rent your more, youknow, everything that you need to do and if that one slot it's empty toolong, extra day or two or you let a car sit there for 100 days and you don'tsell it. So you don't get any f, and I, you don't get trade, you don't getnothing. Um, you know, to me, if you just focus on that one slot, um, andact like that is the only slot and the only car you have to sell to make money,then I think they start treating it a little bit differently and um, so yeah,it's the turnaround time is the achilles heel of everybody because ifyou take 15, 20 days to get a car finally through, then you're alreadyhalfway through more than halfway through the sale cycle that it shouldbe And you're not gonna want to get aggressive enough to move it, you know,by the time it's 21 days old, you should be positioned here to reallystart, you know, maybe asked for extra money in the first week or two. But bythe time it's 21 days start getting realistic by day 30 getting off of it.If you have a 30 day, 60 day age policy,...

...when we're going on average, 30 days,it's taken too long. You're gonna drag that on and dealer, you're just goingto continue to bleed through an aging. You know, and you might not have anaging problem because you, you blow it out by day 45 or 50 or day 60 becauseyou have an agent policy, but not maximizing gross. Mhm. Mhm, mm. Yeah. Yeah, I'm Michel Cirilloand you've been listening to the dealer Playbook podcast. If you haven't yet,please click the subscribe button wherever you're listening right now,leave a rating or review and share it with a colleague. Thanks for listening.

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