Wards Dealer Business, May 9, 2018 INDUSTRY VOICES – by Dennis McGinn
If you’re a fitness buff, you know pounds won’t drop or muscles tone without effort – consistent exertion over time driven by a dedication to a workout plan. Most used-car operations could lose weight and tone up. I have the right workout plan for that.
Here is your three-point fitness goal:
- Eliminate hundreds of dollars of margin erosion from every used car put on the lot.
- Get more cars to the lot faster to take advantage of their prime window of retail sales opportunity.
- Tone the productivity and communication of work from vehicle acquisition into reconditioning and to the sales lot to eliminate friction and finger-pointing.
When starting a fitness regime, it helps to understand muscle structure and physiology. Likewise, insight into used-car structure and physiology is similarly useful to achieve maximum burn and gain. For this, I’ll refer to a few conceptsused decades ago to turn automobile manufacturing on its head.
First, though, hop on the scale and let’s get a baseline measurement before we start.
A few questions: What is your current used car turn rate? What is your average time in days to get vehicles from acquisition to the sales line, or time to line (T2L)? What is your current used-car profit margin per unit retailed? (: $1,350 average front-end.) We’ll look here at improving these three essential used-car metrics.