![]() Insight 1: The dealership with the higher Cost to Market percentage acquired a far-larger share of inventory from auctions compared to the other store. We used the Global Acquisition system in ProfitTime GPS to understand the roots of the disparity. The observation led to a discussion about how/why each store was acquiring its inventory. We all agreed the Cost to Market difference between the two stores was substantial. ![]() It wasn’t a surprise to anyone that front-end gross profits were far richer at the store with the lower Cost to Market percentage than the other. At a similar store, the overall Cost to Market percentage was 83 percent. Within the group, one store’s overall Cost to Market percentage was 92 percent. That’s been the case at a Midwest dealer group I visited last week. At many stores, the inventory-level Cost to Market percentage has been trending upward. In fact, it’s a smart move to ensure you’re doing everything you can to satisfy every customer who comes to your dealership.īut here’s what’s problematic: Dealers and used vehicle managers often aren’t aware of how the new car masquerade can hurt their used vehicle department, especially when you over-rely on auctions to acquire the near-new inventory.Ī key signal that the new car masquerade may be hurting your used vehicle department typically appears in the department’s inventory-level Cost to Market percentage. This new car masquerade in the used vehicle department isn’t necessarily bad. As a result, your used vehicle department is actively stocking one- or two-year-old vehicles that can help you make deals with customers who came in wanting a new car. Perhaps the circumstances are familiar at your store: The new car department remains under-stocked on inventory, and you’ve got some would-be new car customers who can’t get the new car they want because you don’t have it in stock. In the past few weeks, I’ve come to understand what I’d call a “new car masquerade” in used vehicle departments across the country.
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