How to reduce the turnaround time for used vehicles at your dealership

The efficient rotation of used vehicle stock (VO) is key to maximizing profitability in a dealership. Every day a car remains in stock unsold incurs fixed costs and depreciation, reducing profit margins. Therefore, optimizing the days a VO spends in stock before its sale has become a strategic priority for dealerships that want to thrive in this business.

Understanding the financial impact of low VO rotation

Every extra day a used vehicle stays in the lot unsold, the dealership incurs economic losses. On one hand, the fixed costs associated with maintaining that stock, such as personnel, facilities, financing, etc. On the other hand, the depreciation that the vehicle's value suffers over time.

According to data from Sumauto, a used car stops being profitable for the dealership after 60 days in stock. However, the average in Spain is that VOs remain 90 days before being sold, 30 days more than recommended. This results in daily losses of €15 per vehicle: €5 in depreciation plus €10 in fixed costs.

For a dealership with 30 used cars that rotates its stock every 90 days (4 times a year), those 30 extra days per vehicle translate into €52,200 in annual losses for not implementing timely dynamic rotation policies. A significant amount that highlights the importance of accelerating the sale of VOs.

Setting stock days objectives and optimal selling price

The first step is to set clear rotation objectives for the VO department. The general rule is that a used vehicle should not remain more than 60 days in stock from its entry. Some more efficient dealerships even reduce that period to a maximum of 30 days.

To meet these rotation objectives, it is essential to adjust prices dynamically based on how long the VO has been in stock. A recommended pricing policy would be:

• 0-30 days: Optimal selling price according to valuation

• 30-45 days: Apply a discount of 3-5%

• 45-60 days: Discount of 7-10%

• +60 days: Aggressive discount of 12-15%

This way, the most recent and in-demand used vehicles are sold at the maximum price, while those that have been around longer become more affordable to speed up their exit from stock.

Regularly analyze the market and competition

Establishing competitive prices that allow for quick rotation requires closely monitoring the VO market in your area. You must know the prices of similar vehicles offered by other dealerships and individuals, as well as analyze the existing supply and demand.

For efficient rotation, it is vital to understand market trends and adjust the prices of used vehicles accordingly.

Invest in online exposure and digital leads

In the digital age, advertising your VO stock on specialized online portals such as Coches.net is key to maximizing its visibility and attracting potential buyers. According to data from Autocasión and AutoScout24, a used vehicle takes an average of 43 days to sell online, compared to 90 days in a physical dealership.

But it's not enough to just advertise your cars; you also need to optimize the listings with good photos, detailed descriptions, and attractive prices. Integrate your website with an online lead capture and management system to not miss any sales opportunity. Use a CRM for dealerships that allows you to effectively track all incoming contacts.

Train and motivate the VO sales team

Your sales staff must be fully aware of the importance of rotating the VO stock efficiently. Devote regular training sessions to instruct them in vehicle valuation, setting competitive prices, sales arguments for older vehicles, etc.

In addition to training, establish economic incentives linked to the achievement of set rotation goals. For example, extra commissions for selling cars that have been in stock for over 60 days. This way, your salespeople will be more motivated to prioritize the sale of older vehicles.

Measure rotation KPIs and make continuous adjustments

Monitoring key indicators of the VO department is essential to identify areas for improvement and take necessary corrective measures. Some important KPIs to control include:

• Average days in stock per vehicle

• Average profit margin per VO sale

• Average selling price

• Discounts applied based on the vehicle's age

• Vehicles over 60 days in stock

With this information, you can identify the most problematic VOs that do not rotate quickly enough and take measures such as applying more aggressive discounts, changing marketing strategy, or considering alternative routes like car auctions.

Optimize the management of VO stock

In addition to quickly rotating the existing stock, you must optimize the acquisition of new used vehicles. Analyze which models, brands, and segments are in higher demand in your area to prioritize their purchase. Avoid accumulating low-rotation cars that get stuck in your lot.

Use stock management tools for dealerships that allow you to keep a thorough record of each vehicle: entry date, initial valuation, applied discounts, generated leads, etc. This way, you can make informed decisions about which cars to prioritize in your marketing and sales strategy.

Improve the customer experience

Providing an excellent customer experience is essential to foster trust, satisfaction, and repeat sales in the VO business. Customers value transparency, personalized attention, and a hassle-free buying process.

Some recommended actions to improve the customer experience in VO include:

• Training the sales team in customer service techniques and objection handling.

• Offering pressure-free test drives and providing detailed information about the history and condition of the vehicles.

• Implementing simplified buying processes and attractive financing options.

• Requesting and responding to customer feedback to identify areas for improvement.

• Establishing loyalty programs and special offers for repeat customers.

Offering attractive financing

Many used vehicle buyers need financing to access them. Offering competitive financing options through agreements with banking entities can be a great incentive to accelerate your VO stock sales.

In addition to facilitating installment payments, you can propose special discount campaigns for customers financing the purchase of a vehicle that has been in stock for more than X days. Or even offer a small gift or additional benefit for purchasing very old cars to allow for a faster exit.