Want to improve your vehicle turn rate? You need to identify and address these common bottlenecks.
Used vehicle turn rate can dictate your dealership’s success. If you can effectively track your inventory, determine which cars consumers want, and promote these vehicles accordingly, you can accelerate your vehicle turn rate and maximize inventory ROI.
Tracking and evaluating vehicle turn rate allows you to identify any potential bottlenecks in your recon operations. Even a single bottleneck can hamper your vehicle turn rate, so you’ll want to mitigate this issue before it gets out of hand. Fortunately, if you identify turn rate bottlenecks early, you can minimize the issues and prevent them from becoming ongoing problems.
Let’s look at four common bottlenecks that can hold your vehicle turn rate back, how to identify them, and how to fix them.
1. Complicated recon process
Your recon process has far-flung effects on your vehicle turn rate. If you lack a standardized process to get vehicles ready to sell, you risk mistakes that cause recon to drag on and on until there’s no profit left in the vehicle. Perhaps even worse, you are unlikely to get value out of the time and resources spent during this process, which become more mistake-prone every day a car sits. You may commit significant time and resources to prep vehicles that still reach the showroom with various flaws that reduce sale value or hurt your brand reputation.
A seamless recon process is a must-have. To streamline your recon process, evaluate the current process, and establish baselines so you can track process effectiveness. Then, you can establish recon operations goals, implement process changes, monitor performance, and track your results over time.
As part of your efforts to improve your recon process, consider an auto recon platform. These tools help manage every aspect of your recon operations and provide insights into the entire recon process. That way, you can track your recon process and vehicle turn rate and find ways to improve both simultaneously.
2. Above-average holding costs
Holding costs refer to the costs associated with keeping and maintaining a vehicle in your inventory. On average, the holding cost of a vehicle runs from $40 to $85 per day. Ideally, you want your holding costs to be as low as possible — but if you do not account for holding costs, you’ll miss out on an opportunity to reduce operating expenses.
A dealership’s holding costs vary based on its operating expenses and other factors. To keep your holding costs as low as possible, you must improve your recon process. If your recon process is fast and efficient, you can minimize your inventory’s age. In this instance, you are well-equipped to sell a vehicle within days of it being added to your inventory. At the same time, you can lower your holding costs.
3. Exorbitant pricing
Consumers will shy away from vehicles if they feel they are overpriced based on market conditions. So, you must offer competitive pricing that aligns with market expectations but ensures you can optimize profits as well.
It helps to continuously evaluate car market data. You should assess car sales data relating to vehicle sales in your town or city along with national car sales information. It can be beneficial to track and analyze sales data over weeks and months to identify any car sales trends and price your vehicles appropriately.
Whenever possible, review real-time car market data. This information gives you a good idea about car sales as they happen and helps you understand which cars are top choices for today’s consumers and the optimal prices for these vehicles.
4. Lackluster inventory management
You may believe you’re providing the right cars for consumers, but you need data to support your inventory management decisions. Otherwise, it’s virtually impossible to improve your vehicle turn rate.
Recon software helps you assess a wide range of inventory data, including the pricing range, turn rate, and inventory age. With this information in hand, you can liquidate underperforming inventory and add vehicles that align with consumers’ expectations.
Sell more cars faster with ReconVelocity
Your vehicle turn rate is a key factor in your dealership’s success, and you want your vehicles to sell as quickly as possible. By eliminating the aforementioned bottlenecks, you can ensure consumers find quality vehicles at competitive prices on your lots. You can also increase your profits, boost customer satisfaction levels, and differentiate your dealership from others in the area.
At ReconVelocity, we provide auto recon software designed to help car dealers enhance their vehicle turn rate — and more. Our software brings transparency to the recon process, so you can sell more used cars and get them retail-ready faster than ever before.
We are happy to teach you how dealerships benefit from recon software. To learn more about our software or see how it works, request a demo or call us at (850) 616-6294.