How can I sell more pre-owned vehicles? This question comes up at hundreds of NCM Associates 20-Group meetings throughout the country.

I'm listing the best solutions that have been shared by thousands of dealers.

Develop an inventory model that includes:

  • Make, model, trim, mileage and year.
  • Retail price range or price point.
  • Average turn in days.
  • Optimum stocking levels.
  • Aging policy by category.

Carry no less than 30, but no more than 40, dollar days' supply:

  • Every segment of your profile should be tracked by days' supply.
  • Ideal is 30 days' supply plus average cycle time for reconditioning.
  • Purchase only what you need. Buy what turns. Don't shy away because “they are too high this week.”
  • Higher marketplace-volatility vehicles should have a lower days' supply.
  • Have a written buy plan for auctions.

Establish a strategic aging policy ? one policy may not fit all segments:

  • Strive for an average inventory age that is below 30 days old. Measure it daily.
  • High-volatility vehicles (factory auctions) need to go fast; 28 days or out.
  • Older or hard to find models can be kept longer (stable wholesale values).

Have a price strategy for each segment:

  • Determine the transaction price (not the starting price) for every segment and price accordingly.
  • Establish price adjustment strategies based on days in stock and vehicle activity.
  • Track all demo and write-up activity on every vehicle. Adjust accordingly.
  • Inspect vehicles every 15th day in stock. Determine an exit strategy.
  • Use the Internet to help determine price points.

Have an ad and marketing strategy that focuses on pre-owned vehicles:

  • Create your own branding strategy.
  • Establish funds tat drive shoppers to your website.
  • Determine your two best Internet lead provider sources and grow them.
  • Do at least three “Pre-Owned Vehicle Events” a year.
  • Find your niche in your pre-owned market and become the best at it.

Maximize your Internet sales presence:

  • Be sure your vehicle presentation is the best in class on your website.
  • Us a great backdrop for vehicle photos and use it every time.
  • Make web browsing easy. Inventory should be a click away.

Have a daily trade walk with key managers:

  • Evaluate every trade daily to determine retail/wholesale disposition.
  • Estimate reconditioning costs before reconditioning starts.
  • Chose “best of the worst” and create a “transportation special” segment.

Manage reconditioning and track cycle time with a goal of 4-days average:

  • Track every repair order.
  • Track work being done by sublet vendors by having everything on a RO.
  • Instill urgency in service department.
  • Try to have one “go-to person” for your pre-owned vehicle manager to rely on for all reconditioning RO's.
  • Hold service responsible for quality and comebacks.

Track your appraisal-to-purchase ratio with a goal of at least 60%:

  • Track daily, weekly and monthly the number of appraised vehicles against deals made with a trade.
  • Track each manager's appraisal-to-trade ratio and post it.
  • Track your success ratio in trading off-brand vehicles vs. brand vehicles.
  • Insist that your sales force does an active appraisal on every vehicle.
  • Assign accountability for consistently missed appraisal values.

Have a clearly defined disposal strategy:

  • Develop a sealed-bid sale process for non-retail trades.
  • Determine your disposal strategy for retail off-brand products.
  • Have a ‘Last Chance” section.
  • Can you “E-tail” on eBay?

This is a compressed list. Look it over, sit down with your staff and use it as a starting point to sell more pre-owned vehicles.

Tony Albertson is executive conference moderator for NCM Associates. He is at talbertson@ncm20.com.