Are you buying used cars based on feel or data?

I recently sat in an executive meeting with a small auto group talking about used car profitability and age policy.

One store was holding on to aged inventory and not liquidating it per group policy.

The new GM made the argument: "If we wholesale those vehicles, we'll just have to replace them. And we'll lose the recon investment every time."

The group's director asked, "Why would you replace a unit that aged out?"
The GM said, "Because we need vehicles in that price range for subprime deals."

The director followed up: "Then why are these aging out?"

GM: "We're not getting enough traffic on them."

The director was getting pretty animated: "Exactly! So why would you stock a car that no one wants?"

The room went silent.

I've been there. I have managed my inventory by price buckets and MDS but I was ignored my own sales rate.

I bought vehicles because they fit a certain price range, age, and miles bucket. Not because that make and model performed well for me.

I eventually learned that's not the best strategy. But unfortunately it was after months of wholesale losses and frustration.

I started stocking based on individual unit turn rate and profit. As my mentor used to tell me: Stock what you sell. Sell what you stock.

Sure, this takes time to research, plan, and execute. But without it, you're just throwing darts in the dark.

Are you listening to your customers and your market—or are you buying based on feel?