Using AutoTrader’s Trade-in Marketplace Solutions
Aged inventory is an age-old problem but it’s no joke – tying up cash and hurting profitability because you’re sitting on a depreciating asset. Yet, this is an entirely manageable situation, and with today’s tools and technology, aged inventory should be a mere blip on your balance sheet.
One of the most critical components of a sound process is an exit strategy that minimizes losses.
Tips for Moving Aged Inventory:
Analyze your inventory. The first thing you should do is take stock of where, how and what you paid for every used car on your lot and percentage of units by days in stock. In all likelihood, this inventory analysis will reveal your buying pattern. It will also lay the groundwork for retooling your approach to acquiring future inventory.
Organize your inventory by its aged status. While accepted industry practice is 60 days, you’re freezing capital. Thus, your process should include tactics that address cars at 15-, 30- and 45 days and beyond, which should include weekly monitoring of your aging inventory on the Search Results Page (SRP) and Vehicle Details Page (VDP) on your website as well as third-party sites.
Start moving your vehicles.
- Get your cars front-line ready as soon as possible. Use a tool such as vAuto to see how long it will take you to get the vehicle to your website and third-party sites, fully merchandised from the time you purchased it. Coming out of the gate quickly helps drive down days in inventory as well as turn rate for your store.
- For cars at 30, detail a selection of your aged vehicles and move them to another location on your lot. Reevaluate your pricing. If you’re in a group, call other dealers to see if they will take any of your cars.
- At 45 days:
- Detail the cars again and move them to the front line of your lot
- Go online to see what they are retailing for and check out their wholesale price; adjust prices down accordingly
At 60 days, turn a negative into a positive. According to the NADA, the cost of keeping a used car in inventory is $28/day. Although this varies by market, you’ve likely sunk well over $1,600 per unit for every car that’s been on your lot for 60 days, so it’s time to cut your losses. Your options:
- Wholesale every car that’s over 60
- Go to AutoTrader.com’s Trade-In Marketplace (TIM) for offers
- Call your auction house
Use TIM tool to get offers/bids for a car. Reevaluate whether you want to keep the car or dispose it through TIM. More tips and help for dealers can be found by clicking on the here.