Used car departments have always been the key to any dealership reaching its maximum profitability. In these current economic times with inventory cost up and grosses down, you need to very smart about your inventory practices.

When was the last time you looked at what is selling for you on your used car lot? I don’t mean what sold last week, what used cars have sold for you over the last year or two. A report to show you this is available in any DMS. Pull that report and compare it to your current inventory. You may be a little scared!

With turnover the way it is in our industry, every used car manager is going to have his “favorites” that he believes sells better than others. It is true having several program Camry’s at a Toyota store works well but loading up a Ford lot with them is not a smart proposition.

Pull this report and look for trends. Look what the public comes to your lot to buy.  Rule out the one or two sales of a given model. When times are good, you can take a chance a “cream puff’ that gets traded in.

Look for models that you have consistently sold month over month. This is what you want to have on your lot. Used car prices are fluctuating so fast these days, make sure to have vehicles that will turn and earn!

Also, look at how long it took these models to sell on average. Try to stock inventory that has a fast turn over.

Look at average miles and ACV of what has sold for you. This will all give you valuable information on what your inventory should look like.

When you are done analyzing this information, you should be able to put together a virtual inventory that works best for your store. Go compare that to your current inventory and see how many units you have that do not fit into your ideal inventory model.

Soon, new car supply will catch up with demand and then demand for used cars will decrease causing values to decrease. Don’t be kept with a lot full of water!

Think efficiency and play to the majority in this economy to maximize your profits. When things get better in the economy, then you can take a chance on that used Porsche on your Ford lot because you think it will increase your drive by traffic.