The Dealer Playbook
The Dealer Playbook

Episode · 10 months 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 changing and modern car dealers are meeting the demand. I'm Michael Cirillo and together we're going to explore what it takes to create a thriving dealership and life in the retail automotive industry join me each week for inspiring conversations with subject matter experts that are designed to help you grow. This is the dealer playbook. Yeah. Mm mm. Yeah. Like when you go into a store, when you do your 20 groups or your training through your university or things of that 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 the other ones that you would recommend dealers pay attention to that they need to avoid and or fix immediately? Um,...

...again, we focused on increasing the amount of cars to sell in the 1st 30 days. But in order to do that, what we found was the Keeley Steele was turnaround time. Um, if time is of essence 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 consider holding cost. How much per day does it cost for a car to sit on in the slot And it's upwards of 35-75 or more per day. Um, some dealers are paying 100 a day 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, not getting through services, $200 expense. Now, one way I figured to overcome that with dealers is get them to understand Just forget about having 100 slots on your lot because you've got 99 other ways to make money then this one car taking too long. Let's just imagine you have one slot, you have one slot to sell a car to make enough money to make...

...your payroll, you rent your more, you know, everything that you need to do and if that one slot it's empty too long, extra day or two or you let a car sit there for 100 days and you don't sell it. So you don't get any f, and I, you don't get trade, you don't get nothing. Um, you know, to me, if you just focus on that one slot, um, and act 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 if you take 15, 20 days to get a car finally through, then you're already halfway through more than halfway through the sale cycle that it should be 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 really start, you know, maybe asked for extra money in the first week or two. But by the 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 going to continue to bleed through an aging. You know, and you might not have an aging problem because you, you blow it out by day 45 or 50 or day 60 because you have an agent policy, but not maximizing gross. Mhm. Mhm, mm. Yeah. Yeah, I'm Michel Cirillo and 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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