Used Hyundai Inventory | Salem NH Hyundai Dealer

 

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 1. Market day's supply

This metric measures market supply/demand data on specific used cars, and offers a thumbnail read of their desirability among potential buyers. The goal: a 70-day market day's supply for your entire inventory of used cars. The benchmark should guide, but not strictly define, a dealer's used cars acquisition strategy. Broadly, used cars with a market day's supply of 65 days or less are often retail no brainers - that is, the balance of supply and demand data suggests these used cars will sell quickly. However, used cars with a 120-day market day's supply can also make good sense as retail used cars, depending on a dealer's ability to acquire it right and align the used cars pricing, fair amount of competing cars. The key here is striking an inventory-wide balance between highly desirable and less desirable used cars. In general, the 70-day mark indicates a well-balanced inventory of used cars.

2. Cost to market

For much of 2012, dealers complained that high wholesale values for used cars make buying used cars right more problematic. They found the cost of reconditioning and packing used cars hurt their ROI and profitability. These insights were gleaned from tracking the cost to market metric for their used cars inventories and individual used cars. The metric measures the ratio or "spread" between the dealer's cost to acquire and make a used cars ready and its prevailing retail price point.

The benchmark: Dealers should aim for an 84 percent cost-to-market metric for their used cars inventories. This creates a 16 percent spread to achieve a dealer's front-end gross profit goals. This benchmark should guide vehicle acquisitions to ensure appraisers and buyers can readily understand the relationship between the acquisition price, other costs (e.g., reconditioning) and a used cars likely gross profit potential. The old saying "you make your money when you acquire a used car" remains true today.

3. Price to market

This metric compares the asking price of a used cars to the prevailing prices of similar used cars available in a market. It's ever-more critical for dealers to offer competitive pricing on used cars to capture consumer attention. The most successful Velocity® dealers manage this metric in relation to a used cars market days supply metric and its time in a used cars inventory.

Example: A vehicle with a 120-day market days supply might be priced 5 percent less than competing units (a 95 percent price to market) during its first seven days as a retail unit. The 5 percent discount reflects the unit's lesser degree of desirability because the market days supply metric suggests a high degree of retail competition. If the used car doesn't sell in a week, a dealer would adjust the pricing to 93 percent price to market for the next seven days. The cycle typically continues until the used cars sell.

4. Inventory age

Every dealer knows it's important to sell fresh used cars fast to maximize gross profits and used cars turn. That said, I still see a lot of dealers with more than half of their used cars inventories older than 30 days. This scenario suggests a problem managing cars that don't sell right away. The causes of aging inventory are many - the wrong car, the wrong prices, too much time lost to make it retail ready. Regardless of the issue, however, dealers who maintain at least 50 percent of their inventory under 30 days of age are best positioned to maximize customer satisfaction, their inventory turn, investment ROI and profitability in used cars.