6 of the best ways to boost your dealership’s used-car results

Key performance indicators (KPI).

They are the benchmarks that tell you whether your dealership is on track with used-car sales – or if you have more work to do to get the best possible results.

But which indicators rise to the level of being “key” to your dealership’s sales performance?

Cox Automotive addressed KPIs in “Metrics That Matter for Best Dealership Performance” in its 2018 Used Car Market Report & Outlook.

110717 IL Personal touch important, even though car shoppers want digital optionsBased on “vast amounts of data from thousands of dealers, including the highest performers,” Cox came up with 12 KPIs and best-in-class benchmarks “against which dealers can measure their own performance.”

Here are the first six indicators, according to the Cox research:

Used-to-new ratio

“Used retail unit volume equaling or surpassing new retail volume is a foundational correlation of highly successful used-vehicle departments, assuming the dealership is meeting new-vehicle volume goals.”

A great result is 1.25 used vehicle sales to every one new-vehicle sale.

Inventory turn rate

“The highest performers turn inventory every 20 days … Fast inventory turns maximize high-gross opportunities associated with fresh inventory and drive profits in other dealership departments.”

Price to market/market days supply

“Top performers embrace the balance between a vehicle’s desirability and its price. They use data to dictate when it is appropriate to ‘go for the gross’ and when the window for profit is short … The data is also a foundational element in inventory acquisition and appraisal processes.”

Mechanical and cosmetic reconditioning time

“Top performers solve reconditioning delays … Speed is paramount.”

Reduced reconditioning markup for older vehicles

“Retail reconditioning hinders vehicle acquisition, especially on older vehicles that tend to be some of the most desirable but also have the highest reconditioning costs.”

Packs

“High performers understand the drag that packs place on their used car operations. They slow down acquisition, including reducing new car appraisals.” The Internet has changed this dynamic.

Visit the Inside Lane blog next week for six more KPIs from top-performing dealerships.

For more details, download the 2018 report.

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