Deal Pack Blog

Effective Inventory Management: Get rid of those cars sitting on the lot for too long!

posted on: June-30-2014
by: Scott Hackett
category: BHPH Dealership

The most effective profit generator in the dealership business is high asset turnover. If vehicles are staying on the lot for longer than 60 days, it is time to start thinking about a new strategy. The first place to begin is physical inventory. It is important to get a count of every vehicle on the lot each month to make sure that the vehicles exist and are correctly recorded in the software. After the physical count of inventory is complete, use the software to generate a report of all the vehicles in stock and compare the two counts. If there are any differences, make the necessary changes and determine the cause. Finding the cause of the discrepancy will give management the ability to correct the problem. This may mean an employee needs training or is failing to following protocol. In either action, correcting the problem will ensure better performance in the future.


Once the inventory is present and accounted for, listing every vehicle that has been on the lot for greater than 60 days will help to find the vehicles that require special attention. One effective option would be to wholesale those vehicles and find replacements. This may generate a loss but the space, time and money the vehicles were absorbing is more valuable. If two vehicles are sold in the time it would have taken to sell the first vehicle than, the loss may already have been earned back with a profit.  This can only happen however, if the new vehicles are more desirable. Finding new used vehicles can be difficult. The beauty of the digital age we now live in is the many tools out on the web giving dealerships the edge to find decent cars for decent rates. This is enhanced even further when a tool such as BookItOut is used to find a comparable wholesale and retail value that can then be used to maximize the selling price. There is a reason some vehicles do not sell and remain on the lot for extended amounts of time. Do not let the vehicle’s undesirability take a sale away from your dealership; get rid of the vehicle and make room for bigger and better things.

Subscribe to Deal Pack Blog

Enter your email address and be notified of new posts.