Used Car Optional Equipment

[joe.pistell]

Joe: not everyone sells program cars. Good under 50K mile trade's are selling at a premium. I've got a dealer client who went one-price 18 mo ago. Used car gross is up 20% from when they sold traditionally. your correct, it's operations. More now than ever before... Dealers need to market and price the inventory correctly, get the traffic and hold the gross.

Kevin,

1. You wrote: "...under 50K mile trade's are selling at a premium." Every single used car is selling at a premium. Used car ACVs are so high that the new leasing programs are killing the "almost new used car" market. Want Proof? see below*
2. Your client that went to one price and created more gross due was to internal reasons (i.e. weak manager, volume based pay plan,, etc...).
3. "Price the inventory correctly" is preaching Velocity and that's a turns based profit system
4. "holding the gross" is another internal source of profits (like velocity is)

*17 years of used car price data.

Profits and premium are NOT the same.

TODAY, a used car has an ACV that is 13% higher than the historical average. Consider that a $20,000 unit costs $2,600 more than the historical average. What has happened is that quality used cars are so damn expensive, the gap between new and used has CAPPED margins.

 

[DealerMarketing]

Joe: Question..what does the 90-130 represent? not disagreeing with you at all.. thanks

 

[joe.pistell]

Joe: Question..what does the 90-130 represent? not disagreeing with you at all.. thanks

DOH!

I forgot the link! my bad!

Manheim Used Vehicle Value Index
January 1995 = 100

"By applying statistical analysis to its database of more than 5 million used vehicle transactions annually, Manheim has developed a measurement of used vehicle prices that is independent of underlying shifts in the characteristics of vehicles being sold."

Manheim - Consulting​

See tab marked "Monthly Index".

 

[DealerMarketing]

not to worry Joe.. You guys are still the king of the mountain and I'm sure you still turn a good profit every month. thanks for the info.