How are you measuring used car stock turn?

By Brian Milsted

Author Brian Milsted is the managing director of Sales Lynx

Most auto retailers measure their used car stock turn by adding up the total days in stock for all their retail used car stock, dividing that by the number of units, times the number of days in the month, to establish an average days in stock figure.

You can take that a step further by also measuring your retail sold days, to identify the stock turn of the cars you are actually selling.

Typical example
Say your average days in stock is 45 days. If you’ve sold, say, six cars this week, you can work out the average number of days they’ve been in stock. Say it works out at just over two weeks.

If your retail sold days is lower than your average days in stock, it means you are selling your fresh stock and not dealing with your problem stock. Conversely if it is higher, it means you are managing to get rid of your over-age stock.

Useful tool
Retail sold days is a useful measurement that few dealerships seem to use.

You will need to be fairly rigorous about logging the number of days in stock for every used car you sell, but if over-age cars are an issue in your dealership, or look likely to become one, it is worth keeping an eye on. It’s like a speedometer for your used car business.

Your action plan
•Measure average days in stock
•Measure retail sold days
•Compare the two figures
•Address any over-age problems identified
 

You can contact Brian at brian@saleslynx.co.uk