Isn’t it interesting in our industry how much time and effort we put into the new car side of our dealerships? All the work we put into selling the number of cars that is our market share responsibility each year. The training we do for our sales people, the meetings we attend, the time that the new car managers spend with the factory rep on our new cars. The interesting part is the cars that make money forever are the ones we pay the least amount of attention to.
In the very beginning (mid ‘80s) of Progressive Basics, after my first NADA appearance, I was asked to speak at a 20 group in Cape Cod. I was in my late 30s and these were older dealers. I was the youngest, by 25 years, in the room. These were well known dealers throughout the country who now have second and third generation operators.
After speaking, one of the older dealers in the room said, “Tim, did you know a used car never loses a dime.” What I will share with you now is one of the most interesting things I have ever heard. He said, “The factory sells it to us, at a profit, we sell it for a profit, we trade it back in and sell it again for a profit. The next time it is traded it goes to an independent, the wholesaler makes a profit and the independent makes a profit. Then it will go to a pot lot where it will be sold for weekly payments for a profit. When it finally dies, it’s sold to a salvage yard for a profit and then sold for parts for a profit. After this it is sold to a crusher for a profit and then to a foundry, made back into a new car and sold back to us for a profit.”
The thing about being in a car dealership is we lose sight of the fact that our profit trail never ends, only our ability to make it.
I look forward to seeing all of you at the 11th Digital Dealer Conference and Exposition in Las Vegas in October. It is always exciting to see old friends and new faces. It is a good feeling to fill a room and feel like I still have something to offer both old and new generation car dealers and managers. This time I will speak on how to build a pre-owned department ‘storybook.’ I really hope you join me there.
Tim Deese is the CEO and founder of Progressive Basics, Inc. He is a former franchise car dealer who has designed and implemented used car training and marketing for 15 manufacturers in 28 countries. Progressive Basics has trained over 50,000 dealers and managers. He has been a speaker at numerous NADA conventions, and was one of the top rated speakers in 2001 and 2008 at the Australian Automobile Dealers Associations Convention. He spoke at FADA conventions in Quebec and Hong Kong, along with Ford and BMW of the Middle East. Tim Deese is also one of the key speakers at Fenabrave in Brazil 2009. You can reach Tim at: firstname.lastname@example.org