Page 50 - Final Variable Operations

Pricing Strategy – Used Cars

Pricing should be monitored on a regular basis (at least weekly), but should be spot checked daily for missed
opportunities.

Prices are evaluated by:

• Overall view should come from the Market Days Supply screen.
• Make sure your Competitive Criteria for miles results in at least 20-25 cars for your Like Mine Days Supply
(LMDS).
o You will want to make sure that the competitive set is looking at no more than “Series”,
“Displacement”, “Drivetrain”, “Transmission” and “Body Type”. Too many criteria reduces your
representation of the market competition.
o If LMDS is unusually high, price the vehicle aggressive on day 1 – they’re not selling quickly. (Calculate
Days to Sell based on vRank and Like Mine Days Supply and price accordingly.)
• Use the target drop down box to match your LMDS to your Target, then adjust the %Mkt accordingly.
• Monitor “Days in Inventory” buckets to make sure vehicles haven’t been overlooked for price and/or
something else is weird about the listing – is it a rare unit, are the pictures not right, are there missing
pieces of information in the description, is the description accurate, etc.
• Check out a unit’s VDP% on merchandising tab. Do a walkaround the unit, check the description, does it
have 40+ photo’s, does it need a Detail….what is wrong with this unit? If VDP is unusually low (meaning
folks aren’t clicking on the detail of that unit), the price may need to come down even if everything else
checks out correctly.
• If a unit is over 60 days old then unit needs to be priced to sell (no lower than 92%) regardless of its
position in the market. This may mean selling for a negative profit.
• For the first 30 days units may be priced above Adj % Mkt, up to 102%, after day 30 look at Like Mine
Days Supply, vRank, comp set (Days to Sell in Market) and price accordingly. It’s important to have an exit
strategy from Day 1.
• Before a unit goes to Auction, it should be presented to OKC store, if a Toyota, and/or the Chevy store, if
a Domestic unit, to possibly be sold to them first. Then units should be priced at Wholesale and/or
evaluated using Profit Time. If a unit has a Profit Time score of 10-12 “Platinum” then you will want to
give this unit more time to sell. It’s not a bad unit or poorly priced unit. You will also want to consider
holding margin on Platinum units. Bronze units should be priced to move from day 1. Time has run out
for Bronze units and we want to make room on our lot for inventory that makes a profit.
• Certified units need to be priced with other certified units and at least $500 over a non-certified.
• Early Warning Radar (EWR): units will be marked in the 4-square with EWR when GM/Director decide that
they car must be moved out quickly due to exceptions such as, TRAC, over appraised car, high miles, bad
color, gut feeling, bad purchase etc. An expiration date will be assigned to the car by
GM/Director…..EWR-20, EWR-30, etc. EWR cars will be tagged in vAuto for easy identification.

4-Square will be marked on a trade car on the windshield.