From Like I See It by Dale Pollak
2 proposals for managing used-car inventory
Sunday October 15, 2017
Article Highlights
- The answer to the persistent problem of managing aged used vehicle inventory lies in two new best practices.
- 1. Manage investment quality, not inventory age
- 2. Set a hard cap on your inventory investment
The following is excerpted from Like I See It: Obstacles and Opportunities Shaping the Future of Retail Automotive by Dale Pollak.
If I needed investment advice, I probably wouldn’t go to a car dealer or a used vehicle manager. To be sure, I’ve come to respect dealers and used vehicle managers for their savvy and skills in retailing used vehicles. But I’ve found their actions and instincts as managers of investments in used vehicles leave a lot to be desired.
I say this due to the persistence and prevalence of aged used vehicle inventory on dealer lots across the country. By and large, these aged units are the cumulative result of bad investment decisions that, too often, could have been avoided.
The answer to this persistent problem lies, I believe, in two new best practices I’d like to propose for the industry.